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In The Pensions Act 2008, it was announced that employers would be required to automatically enrol eligible jobholders on a qualifying pension scheme. The new regulation is aimed to encourage private pension saving amongst employees on a lower or moderate annual income. As the legislation change will be rolled out later this year, Portfolio Payroll picks out key HMRC information to help employers and their designated International Payroll Manager, Payroll Officer or administrative team understand the pensions reform.

In preparation for the 2012 pension changes, employers and payroll departments much identify the employers that qualify for auto-enrolment. There are three different categories - eligible jobholders, non-eligible jobholders and entitled workers. To find out whether or not employees are eligible, you must find out a worker's age, annual earnings and if they work - or ordinarily work- in the UK.

If an employee is aged between 22 and the state pensions age, work - or usually work - the UK and earn more than the higher trigger for pension auto-enrolment (which currently stands at £7,475), they are an eligible jobholder. These must be automatically enrolled, unless they are already part of a qualifying pension scheme with your business.

A non-eligible jobholder is an employee that works, or usually works, in the UK. They must also be aged between 16 and 17 and earning between the lower and higher trigger (£5,035 and £7,475) or aged between 16 and 21 and annually earning over the higher trigger. While these workers won't be automatically enrolled, employers must provide them with the relevant documents and help them to join if they want to opt in.

The final category is entitled worker - these employees must again be given all relevant information regarding their right to join the qualifying pension scheme. Employers can identify these workers as those aged between 16 and 74, working - or ordinarily working - in the UK, and earning less than the lower trigger.

Once an employer has determined which employees are eligible for auto-enrolment, all workers must be presented with the relevant information in writing. Also, as it is possible that payroll systems won't support the new earnings assessment, you may want to get in contact with your software provider to discuss the changes.

For more employer information and recruitment tips, visit the Portfolio Payroll site. If you have any payroll vacancies, Portfolio Payroll has over 20 years experience in payroll recruitment and can help to fill temporary, contract and permanent roles in any industry sector.


About Portfolio Payroll:

Portfolio - a market leading specialist payroll recruitment agency in the UK - offers nationwide recruitment services to start-ups, small business and global companies. As the only payroll recruitment agency recommended by the Chartered Institute for Payroll and Pension Professionals, Portfolio Payroll has a clear understanding of the payroll industry and the skills required for payroll vacancies. For more information on the services Portfolio Payroll has to offer, ring 020 7650 3199.

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