In April 2019, the law on workplace pensions changed dramatically. The changes meant that employers are now by law obliged to automatically enrol the majority of workers in a pension scheme. Whilst most employers are following the law correctly, it is extremely important to raise awareness of the rules relating to something which can have such an impact on employers and workers alike.
Should I be automatically enrolled?
An employer must automatically enrol a worker in a pension scheme if they:
However, there are exceptions. An employer does not have to automatically enrol a worker if:
These are the main exceptions. Others can include:
Even if exceptions do apply, most workers can usually still join the scheme voluntarily, and the employer usually cannot refuse.
What does an employer need to do?
When automatically enrolling a worker into a workplace pension scheme, an employer must write to that worker. The employer must tell them:
What can an employer not do?
An employer cannot treat a worker unfairly because they have joined or wish to join a workplace pension scheme. This will include, in the case of employees, unfairly dismissing an employee. An employer cannot pressure a worker to opt out of a pension scheme.
What if the employer does not follow the rules?
If an employer treats a worker unfairly or pressures a worker to opt out of a workplace pension scheme, this may result in a claim being made to the Employment Tribunal. If an employee has a claim for unfair dismissal, the basic award can be up to £16,320. The Employment Tribunal can also order an employer to pay a compensatory award of up to £89,493.
A worker can also make a complaint to the Pensions Ombudsman or the Pensions Advisory Service. If a complaint is upheld, the financial loss to an employer can be devastating. For example, not only can the Pensions Ombudsman make the employer make good any financial loss, but they can make an employer pay compensation for distress and inconvenience. There is no financial upper limit to the value of any award made by the Ombudsman.
If you have any concerns about whether a worker should be automatically enrolled, or you are a worker with concerns about how your employer is handling your pension, you should seek independent legal advice.
Fraser Dawbarns have friendly and experienced lawyers who can offer advice on employment law in King’s Lynn, Wisbech, Downham Market, March and Ely.
This article aims to supply general information, but it is not intended to constitute advice. Every effort is made to ensure that the law referred to is correct at the date of publication and to avoid any statement which may mislead. However, no duty of care is assumed to any person and no liability is accepted for any omission or inaccuracy. Always seek advice specific to your own circumstances. Fraser Dawbarns LLP are always happy to provide such advice.
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