Automatic enrolment (or auto enrolment) was brought in by the Government. The idea is to help people save for retirement through a work place pension. Under this law, employers must automatically bring all ‘eligible workers’ into a pension scheme. They must also pay towards their employees’ pensions.
The LGPS is a qualifying scheme under auto enrolment rules.
Different types of workers
Under auto enrolment law, workers are put into three groups. These groups depend on earnings and age. The groups are:
- eligible jobholders
- non-eligible jobholders
- entitled workers.
‘Eligible jobholders’ are workers who earn more than the ‘minimum earnings threshold’. They are also between 22 and state pension age, and work in the UK.
‘Entitled workers’ are not automatically brought into the LGPS. However, they can choose to join the scheme.
Opted Out or joined the 50/50 section?
If you have ‘opted out’ or joined the 50/50 section of the LGPS, your employer must bring you back into the main section of the scheme every three years. Once you have been brought back in, you can opt out again. You can also re-join the 50/50 section from this date.
If you are a ‘non-eligible jobholder’ or an ‘entitled worker’, your employer must bring you into the scheme if you become an ‘eligible jobholder’.
Your employer may not bring you back in if:
- you ‘opted out’ of the LGPS within 12 months from when you would be brought back in.
- you are leaving, retiring, or been dismissed from your job.
- your employer thinks you hold lifetime allowance protection. This includes Primary, Enhanced or Fixed Protection.