Automatic Enrolment 

Introduction

Between October 2012 and 2017, new government legislation will progressively apply to all LGPS employers which will require such organisations to meet a number of new pension requirements.

In brief, the main requirement is for employers to auto-enrol all Eligible Jobholders into a Qualifying Pension Scheme with effect from the employer's Staging Date. New rules will also apply surrounding opt-outs (making it more difficult for members to opt out of the scheme) and a requirement will be introduced to re-enrol staff who have opted out after a period of three years.

The LGPS Regulations will continue to apply; therefore it is up to employers to consider how both sets of legislation will apply concurrently to their organisation.

This means all categories of new staff that are currently auto-enrolled under the LGPS Regulations, must continue to be auto-enrolled after the staging date.

The purpose of the auto-enrolment legislation is to increase the number of staff across the country's workforce that will be enrolled automatically into a qualifying pension scheme. This will not necessarily be the LGPS for all current employers, unless they are required to do so under the LGPS Regulations.

 

Registering with the Pension Regulator

After your staging date has passed you are required to register with the Pension Regulator within 4 months. You can do this by registering online by following the link.

You may find the following pieces of information useful:

  • The LGPS PSTR number: 00329946RE 
  • The Pension Scheme registry number (PSR): 10079153
  • Employer Pension Scheme Reference: The employers unique reference number
 


Certificate of Compliance

If you are asked about a certificate of compliance for the LGPS (to show that it is a Qualifying Scheme) you can pass on the following information provided by the Local Government Association (LGA).

"The LGPC Secretariat has obtained confirmation from the Department of Work and Pensions (DWP) which confirms that as the LGPS is a public sector, final salary, contracted-out occupational scheme there is no requirement for employers using the scheme to self-certify that it meets the quality requirements for being an automatic enrolment scheme. Guidance published in July 2012 by the DWP entitled Automatic Enrolment: Guidance for employers on certifying defined benefits and hybrid pension schemes outlines (in section 2.6) that final salary schemes that are contracted-out of the state second pension automatically qualify as automatic enrolment schemes. The contracting-out certificate is taken as evidence that the scheme satisfies the quality requirements. The LGPC Secretariat has been informed by DWP that when this guidance is next updated it will be amended to more clearly reflect that employers using the LGPS do not require a certificate of compliance."

 


Explanation of some key terms

Staging Date

Auto-enrolment will apply to the largest organisations first, based on PAYE size, before being phased in for smaller organisations. The start date for this is referred to as the Staging Date; further details of the current staging dates can be found here.

Eligible Johholders, Non-eligible Jobholders and Entitled Workers

A definition of these can be found here.

Qualifying Pension Scheme

For employers not required under legislation to use the LGPS for new staff, for example admitted bodies, and are considering using alternative provisions, a definition can be found here.

 



Employee Safeguarding

With effect from 1 July 2012 (regardless of an employer's staging date), new legislation came into place to safeguard all employees against certain employers' practices in relation to pensions. Employers must not engage in any act which is intended to prevent or incentivise an employee or prospective employee from joining a qualifying pension scheme.

As a result there are certain things that an employer must not do, both before a person starts working for them and once that person is a member of a pension scheme with that employer.

These safeguards prevent employers from:

  • Stopping active membership of a qualifying pension scheme 
  • Unfair treatment of workers 
  • Inducements 
  • Prohibited recruitment conduct
 


Local Government Association Guides

The LGA has a produced both a brief and full Auto-enrolment guide which are aimed specifically at LGPS employers. We recommend that you read the brief guide and use the full guide as a point of reference. The full-guide has template letters in the appendix. Please click here to access the page holding the full guide.

The Pension Regulator is responsible for overseeing and monitoring compliance to this new legislation and they have a large amount of information on their website providing guidelines on what organisations need to do. The Pension Regulator has also produced the beginners guide to auto-enrolment, but please note that this information is supplied for all organisations and not specifically for LGPS Employers.