Automatic enrolment ― what types of scheme may be used

By Tolley
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The following Employment Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Automatic enrolment ― what types of scheme may be used
  • Qualifying schemes
  • Using 'NEST' or other master trust schemes
  • Overseas schemes
  • Defined benefit occupational pension schemes
  • Defined contribution schemes
  • Hybrid schemes
  • Phasing in of minimum contribution levels
  • Certification requirements: defined benefit schemes
  • Certification requirements: defined contribution schemes

THIS GUIDANCE NOTE APPLIES ONLY TO PENSION SCHEMES IN ENGLAND AND WALES

The automatic enrolment regime requires employers to enrol workers automatically in a pension scheme that meets at least minimum standards (known as a ‘qualifying scheme’). In the case of a defined contribution scheme, those standards include mandatory employer and worker contributions of at least minimum amounts.

PenA 2008, ss 1–99

In considering what scheme to use, the employer should be aware of the minimum standards that apply for a scheme to be 'qualifying'. The Pensions Regulator has issued detailed guidance for employers to help employers meet their responsibilities under automatic enrolment ('TPR Guidance'), including information on the criteria for qualifying schemes.

PenA 2008 ss 1–9; TPR Guidance (no 4) 

For further information on the automatic enrolment regime, see the Automatic enrolment ― overview guidance note.

For further information on categories of worker, see the Automatic enrolment ― who needs to be enrolled guidance note.

Qualifying schemes

As regards to the type of pension scheme nominated by the employer for automatic enrolment purposes, the scheme must be a ‘qualifying scheme’ (ie a scheme that meets certain minimum standards under the automatic enrolment legislation).

PenA 2008, s 1

A qualifying scheme must be either:

  • an occupational pension scheme
  • a personal pension scheme

PenA 2008, ss 18–19

In terms of benefit structure, a qualifying scheme can be either:

  • a defined benefit (DB) scheme
  • a defined contribution (DC) scheme
  • a hybrid scheme (that is, an occupational pension scheme with both DB and DC characteristics)

There are minimum standards that must be

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