Automatic enrolment is a Government initiative to help more people save for retirement through a work place pension. Under automatic enrolment employers are required to automatically enrol their eligible workers into a pension scheme. The employer must also pay money into the scheme through employer contributions. By October 2018 all existing employers will be required to offer a workplace pension scheme to eligible workers.
The Local Government Pension Scheme (LGPS) is classed as an eligible scheme under the automatic enrolment rules.
Categories of worker
For the purpose of automatic enrolment workers are put into 3 different categories depending on how much they earn and their age. The categories are:
- eligible jobholders
- non-eligible jobholders
- entitled workers.
Eligible jobholders are workers who (a) earn more than the minimum earnings threshold, (b) are aged between 22 and state pension age and (c) who work in the UK.
Entitled workers are not auto-enroled into the LGPS, but can make an election to join the scheme.
Members who have opted out or joined the 50/50 scheme
If you have opted out of the LGPS your employer will be required to re-enrol you into the scheme every 3 years on a set re-enrolment date if you are classed as an eligible jobholder. This is also the case if you are an eligible jobholder who has joined the 50/50 section. Upon being re-enroled into the scheme, you can opt out again or make an election to re-join the 50/50 scheme.
If you were either a non-eligible jobholder or an entitled worker when you opted out of the LGPS your employer will be required to put you back into the scheme the first time you become an eligible jobholder.
Your employer may choose not to automatically enrol you if:
- you opted out of the LGPS within 12 months of the date you are due to be automatically enrolled
- you have given notice of your resignation or retirement, or you been given notice of dismissal
- your employer believes that you hold a lifetime allowance protection, such as Primary, Enhanced or Fixed Protection