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Workplace Pensions: Obligations as an Employer

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24th August 2022

Dexter Lawrence Written by Dexter Lawrence

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Britain was one of the first nations in the world to launch a workplace pension scheme that enrolled all eligible employees automatically. A decade later, 79% of UK employees have a workplace pension, according to the Office for National Statistics. This is an increase from 47% in 2012, the year it began.

While workers can choose to opt-out, both the individual employee and their employer pay in by default if enrolled. The government continually promotes the benefits of the workplace pension to ensure people will have enough money to live on when they retire.
In the ten years before it was introduced, the number of employees signed up for a workplace pension had been on a steady decline from 57% to 47%. Now, with eight in ten employees enrolled, the scheme is being hailed a success.


The basic state pension in 2022 is £141 per week. Compared with the average retirement income of £304, this is significantly lower. People are topping up their state pensions with private pensions, including workplace and personal alternatives.

Obligations as an employer

Employers must adhere to a number of criteria, by law, when organising workplace pensions. They must automatically enroll eligible employees into a pension scheme. They must also make contributions to the employees’ workplace pensions.
If an employee isn’t automatically enrolled by law, based on their income, they can still request to join the workplace pension scheme. An employer can’t refuse to sign anyone up. However, the employer doesn’t have to contribute if the employee earns £520 a month, £480 over four weeks, £120 a week, or less.


The employer must pay their contribution to the workplace pension scheme on time. Usually, it should be paid before or on the 22nd of each month. If the employee leaves the pension scheme after paying into it, the employer must refund the money they’ve paid within one month.


Employees can re-join the scheme at least once per year if they change their minds after opting out. An employer can’t force or encourage an employee to opt-out. Nor can they discriminate against any employee for staying in the workplace pension scheme. This includes implying someone will be more likely to get a job by opting out. If the employer wants to close their current workplace pension scheme, they must enroll all members automatically into another one. Employees who are unhappy with the way the company is managing the scheme can contact the Pensions Regulator.

Minimum contribution amounts

Employees are entitled to be informed, in writing, when their employer has enrolled them into the workplace pension scheme. They must be told the date they were added; what type of scheme it is; who runs it; how much the employer will pay in and how much they will contribute themselves.


An employer is permitted to delay the employees’ enrolment date in workplace pensions by up to three months but must inform the workers in writing about the delay. If the employees wish to join in the meantime, they must be permitted to do so. For most people, the minimum total contribution is 8% of their income. The employer has to contribute a minimum of 3% of the total amount. The minimum contribution also has a portion made up of tax relief from the government. This means the employee contributes 4% and the 1% needed to make it up to 8% comes from tax relief.


An employee’s qualifying earnings are a portion of their earnings before National Insurance and Income Tax contributions are deducted. The figure for qualifying earnings has been set at salaries between £6,240 and £50,270 for the 2022-23 tax year.
Employers can increase their contribution as an employee benefit if they wish. There isn’t a maximum employer contribution. An employer can pay any amount of pension contribution for their employees, even meeting the total contribution as an extra benefit.
If you run your own business, you may need professional help with payroll and pension services. If nothing else, it will free up your time, so you can get on with the important task of improving turnover.


Contact DL Accounts to find out more about our services to support businesses.



Further Reading: The Employer’s Guide to Workplace Pensions.