Auto-enrolment—certification of DC schemes
Auto-enrolment—certification of DC schemes

The following Pensions guidance note provides comprehensive and up to date legal information covering:

  • Auto-enrolment—certification of DC schemes
  • When should certification be used?
  • Who can certify?
  • The certification period
  • Who should be covered by the certificate?
  • What should the certificate include?
  • Disclosure of certificate
  • Renewing the certificate
  • Defined contribution schemes—alternative quality requirements
  • Meaning of basic pay
  • more

When should certification be used?

Certification has been designed primarily to cater for employers with existing good-quality defined contribution schemes which do not explicitly meet the minimum contribution requirements for a qualifying scheme for auto-enrolment purposes because, for example, the definition of pensionable pay in the scheme is not the same as qualifying earnings as defined in the Pensions Act 2008, s 13. In this case:

  1. the scheme may instead be able to satisfy any one of the three sets of alternative quality requirements, or

  2. the employer, having examined past and current data held for all relevant jobholders, may be able to determine that, in practice, the entitlement of those jobholders under the scheme has been, and will continue to be, as good or better than their entitlement under the minimum contribution requirements (which may be the case where some variable elements of jobholders’ earnings are not pensionable, eg overtime earnings)—this analysis should be sufficient unless the employer expects changes during the certification period to invalidate this conclusion

Employers may only certify where they have evidence that it is reasonable to believe that their defined contribution scheme meets either the minimum contribution requirements for a qualifying scheme or one set of the alternative quality requirements. A scheme with a certificate in place will be treated as satisfying the minimum contribution