Pensions scheme auto-enrolment: the clock is ticking, are you ready?

Posted by William Downing on
In stages* from 1 October 2012, you as an employer will have to automatically enrol your "eligible jobholders" into a qualifying pension scheme and make an employer contribution.  

Employers in breach could face compliance notices, fines and in the case of "wilful" failure, criminal penalties. 

What is my "switch on" date?

*Your "switch on" date is based on the number of persons in your PAYE scheme on 1 April 2012The Regulator will write to you at least twice as your "switch on" date approaches.  For PAYE schemes of less than 250 staff, final staging dates will be confirmed. 


Number of Employees

 "Switch on" date


1 August 2013


1 September 2013


1 October 2013


1 November 2013


1 January 2014


1 February 2014

 What will it cost?

Costs will increase over 6 years from 1 October 2012 as follows.



Minimum Employer contribution

Overall minimum contribution

Employer’s staging date to 30 Sept. 2017



1 Oct 2017 to 30 Sept. 2018



From 1 Oct 2018



What next?

  • Determine your "switch-on" date.  Implementation can take 6 to 9 months
  • Review existing pension arrangements
  • SHPS is compliant but you will still have additional administrative tasks to meet information and re-enrolment duties
  • Analyse workforce
  • Consult staff.  Changes to your current pension arrangements will require a 60 day consultation. Do employment contract terms need to be changed?

(1)     Your auto-enrolment plan is likely to coincide with hikes in SHPS contributions levels, following disclosure of a £1billion deficit. You may wish to consult about several changes in one go

(2)     Be aware that withdrawal from SHPS could lead to significant exit debts.

  • Make & agree operational processes
  • Go live
  • Monitor & review

Where can I get further help and guidance?

You could attend one of our helpful seminars

1) Pension scheme auto-enrolment

  • 5th July 2012, Blake Morgan Oxford, in association with Barclays
  • 13th July 2012, Blake Morgan Cardiff, in association with Quantum Advisory

This seminar will guide you through the key requirements and tackle tricky issues such as; changing contracts of employment, protecting high earners, dealing with temporary/agency workers and zero hours contractors, retaining salary sacrifice/flexible benefits, avoiding inducements and interaction with TUPE.

2) Pension costs for the Social Housing sector- the 2011 SHPS valuation

18th July 2012, Celtic Manor Newport, in association with Punter Southall

The results of the SHPS valuation herald substantial increases in pension costs for those employers that participate in the scheme.  Employers need to decide on the extent to which such increases can be passed on to employees and may even need to review their overall benefit strategy. In this seminar, social housing experts will help you react appropriately to this very difficult situation.

About the Author

William is head of our Employment law team based in the Thames Valley. He provides immediate and commercially sensitive advice concerning all employment law issues.

William Downing
Email William
01865 254265

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