Automatic enrolment jargon buster

Automatic enrolment terms and jargon explained.

Assessment

Under automatic enrolment regulations, you need to work out who to put into a pension scheme. On your staging date, you have to work out how much each of your employees earn and how old they are. This will identify what you need to do, and is sometimes referred to as ‘assessment’.

Contributions

Paying money into a pension scheme is known as ‘making contributions’. You must pay money into the pension scheme on a regular basis.

Duties start date

This term is relevant for those who become an employer for the first time on or after 1 October 2017 – such employers will immediately have to legally comply with automatic enrolment duties for their new employee(s). These duties apply immediately from the first day the first employee starts working for them.

Earnings basis

This describes what basis of the employee’s earnings you use to calculate pension contributions.

With our Simply Comply set-up route, contributions are based on the standard components of pay – salary, wages, commission, bonuses and overtime, as well as statutory pay for sickness, maternity, paternity and adoption. With our Simply Tailor set-up route, you can use other definitions of earnings instead – find out more on The Pensions Regulator’s website

Employee data

This includes your employee details and pension contribution amounts. You can transfer employee data to The People’s Pension by uploading a file – either manually or transferred automatically through your payroll software (if your payroll provider supports this).

Alternatively you may be able to manually key in the data.

Joiner information

All new members of The People’s Pension receive joiner information about their pension, plus how much will be contributed each pay period, how they can ask to leave (opt out) and other member information.

It also provides login details for the member’s Online Account, where they can check the value of their pension pot and manage their choice of investment funds.

Pay frequency

This is how often an employer pays their employees (eg weekly or monthly).

Pay period

Under automatic enrolment rules, this is the period of time over which earnings are to be measured. For example, if an employee is paid weekly, the pay period would be one week and if they are paid monthly, the pay period would be one month. The minimum pay period is one week.

To align with the pay frequency used to calculate PAYE and National Insurance contributions, the pay period can be a tax week, or a tax month.

Postponement

If you have temporary employees, you may choose to delay working out who you need to put into a pension scheme.

You can only postpone automatic enrolment from:

  • your staging date
  • an employee’s first day of employment
  • the date an employee first becomes eligible for automatic enrolment.

Staging date

If you had a PAYE scheme on or before 30 September 2017, you’ll have a staging date. This is when you need to start meeting your automatic enrolment duties. You can check your staging date on The Pensions Regulator’s website.

Page Options: