Employees are broken down into categories:-
- Worker – someone who works under a contract of employment.
- Job holder – A worker who is aged between 16 and 74 and is working or ordinarily works in the UK under their contract and has qualifying earnings.
- Eligible Jobholder – A jobholder who is aged between 22 and state pension age and has qualifying earnings above the earnings trigger for auto-enrolment
- Non-eligible jobholder – A jobholder who is aged between 16 and 21 or state pension age and 74 and has qualifying earnings above the earnings trigger or is aged between 16 and 74 and has qualifying earnings below the trigger
- Entitled Worker – A worker who is aged between 16 and 74 is working ordinarily in the UK under contract but does not have qualifying earnings.
Eligible jobholders have the right to be auto enrolled in the workplace pension scheme, but may choose not to join (opt-out). However, should they later change their minds, even before the three year review, will be able to opt in.
Non eligible jobholders also have the right to opt in to a pension scheme at any time and to be auto-enrolled.
New eligible workers must be included in the auto-enrolment process and can then choose whether to join or opt out.
An employee has the right to refuse joining a workplace pension as part of the auto-enrolment and should they decide against it, or was not entitled to join it, may later choose or have the right to opt in.
Once the auto-enrolment process has been initiated by the employer, all employees have the right to formally opt out so long as this right is exercised within one month of the date they should have been auto-enrolled. Any contributions paid by them or the employer can be refunded and the employee will be treated as though they had not joined.
For more advice on auto-enrolment, contact us to arrange a free initial consultation.