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Alternative quality requirements
The date an employer will have to assess a worker for their eligibility for enrolment into the workplace pension scheme.
The process of automatically signing employees up to a qualifying pension scheme.
Automatic enrolment scheme
A workplace pension that is a qualifying scheme and provides contributions which at least meet the relevant quality requirements. An agreement between the employer and the pension supplier is required for personal pension type schemes.
Department for Work and Pensions.
Declaration of Compliance
The online process for employers to notify the Pensions Regulator that they are fulfilling their employer duties.
An individual who is entitled to join a pension scheme because they are aged 16 to 75 and ordinarily work in the UK, with earnings below the lower earnings threshold.
Anyone aged between 16 and 75, who ordinarily works in the UK with qualifying earnings.
Lower earnings threshold
The floor of the qualifying earnings band, currently £5,824.
National Employment Savings Trust (NEST) is the name of the national workplace pension scheme. NEST operates as a centralised scheme, as a not-for-profit trustee corporation.
This is the process for a jobholder to actively join their workplace pension scheme.
Opt out period
A one calendar month period, during which jobholders can opt out and get a full refund of any employee contributions. It starts from whichever date is the later of:
Pay reference periods
The period of time over which a worker is normally paid (e.g. calendar monthly, weekly or half weekly).
The definition of earnings used by an employer to calculate pension contributions.
The Pensions Regulator is the UK regulator of work-based pension schemes.
Application of minimum contribution rate until October 2018.
Usually a registered UK occupational pension scheme or personal pension scheme. Charges must also be capped at 0.75% (annual management charge) for any pension scheme to be compliant with automatic enrolment.
Qualifying earnings (QE)
The earnings upon which assessments are based. Also used as the minimum definition of pensionable earnings (currently a band of earnings between £5,824 and £42,385).
QEs include basic pay, salary, commission, bonuses, overtime, and statutory sick pay, statutory maternity, paternity and adoption pay.
Qualifying pension scheme
Relevant quality requirements (RQR)
Every three years employers must automatically enrol eligible employees who have previously opted out. Employers have three months on either side of the re-enrolment date to re-enrol qualifying employees.
An alternative contribution basis to the relevant quality requirements:
Set 1* – Minimum contributions of at least 9% of basic pay (at least 4% of which must be from the employer)
Set 2* – Contributions of at least 8% of pensionable pay (at least 3% of which must be from the employer), provided that pensionable pay constitutes at least 85% of total earnings at scheme level
Set 3* – Contributions of at least 7% of total pay (at least 3% of which must be from the employer)
The date an employer is required by law to start automatic enrolment. This will depend on the size of the employer and their employer PAYE reference.
Upper earnings threshold
The ceiling of the qualifying earnings band, currently £42,385.
An individual who either works under a contract of employment, or has a contract to perform work or services personally (i.e. cannot sub-contract or send substitute) and is not undertaking work as part of their own business.
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