Auto enrolment
The legislation around workplace pensions has changed. Employers are required to put individuals who meet certain criteria into a workplace pension scheme and to contribute towards it. This is called automatic enrolment.
As a fee earner with SQA, this means that if you are aged over 22 and under state pension age and your earnings exceed the monthly trigger for automatic enrolment, you will automatically be enrolled into NEST. The following link provides the most up-to-date earnings thresholds (please refer to monthly figures in the pay reference period table as SQA operates a monthly payroll).
You will receive a letter from SQA to say you have been automatically enrolled. This will include details of the opt-out process. You also receive a Welcome Pack from NEST (separately) which will include a NEST ID number. You need this ID number to opt out.
Please note that if you have been automatically enrolled, your pension contribution will already have been deducted from your payment. If you decide to opt out of NEST, you will receive a refund of your contributions in the following month, provided that you opt out within the time period as specified by NEST in the documentation they send you.
If you require any further information on the above, please e-mail Appointee management
Why has automatic enrolment legislation been introduced?
The Government has introduced the legislation as millions of people are not saving enough for their retirement. The aim is to help more people have another income on top of the State Pension when they retire. The State Pension is a foundation for retirement. If you want to have more, you need to save during your working life. Otherwise, you may reach retirement facing a significant fall in your standard of living.
Who is eligible to be automatically enrolled?
If you are aged between 22 and under state pension age and earn more than the monthly automatic enrolment earnings threshold, you will automatically be enrolled into a pension scheme with SQA. Individuals who meet these criteria are termed "eligible jobholders".
*The automatic enrolment earnings threshold may be subject to change in April each year. The current thresholds can be found at:-
http://www.thepensionsregulator.gov.uk/automatic-enrolment-earnings-threshold.aspx
When will I get paid each month?
The pay date for all fee earners is 15th of the month.
Why am I required to submit my date of birth?
Auto enrolment legislation requires date of birth to be supplied in order to ensure compliance.
I am already in a private or occupational pension scheme. Does this mean that automatic enrolment doesn't apply to me?
No. Automatic enrolment will be based on age and earnings criteria with each employer an individual carries out work for if they are classed as a worker under the terms of the automatic enrolment legislation. The definition of worker under the new legislation includes individuals who have a contract with SQA as a fee earner eg appointees
Which pension scheme will I be automatically enrolled into?
SQA has chosen the National Employment Savings Trust (NEST). NEST has been set up by the UK Government specifically for automatic enrolment.
Who runs NEST?
NEST Corporation is the organisation that runs the Scheme. It reports to parliament through the Department for Work and Pensions (DWP). NEST Corporation is a trust which means it is run on a not-for-profit basis and doesn't have shareholders.
How do I find out more information about NEST?
Questions on the Pension Scheme should be directed to NEST via their website in the first instance:-
http://www.nestpensions.org.uk/schemeweb/NestWeb/public/home/contents/homepage.html
I don't want to be automatically enrolled into a pension scheme with SQA. Can I opt out and how do I do this?
You do have the right to opt out. However, you cannot opt out before you have been automatically enrolled. If you are automatically enrolled, you will receive a letter from SQA advising you of this which will include details of the opt out process. You will also receive a welcome pack from NEST which will include a NEST ID number. You will need this number to opt out. You can opt out either on-line, by telephone or by requesting a paper copy of the opt out form to complete and return.
If you choose to opt out, please note that you will automatically be re-enrolled back into the pension scheme every three years from the date automatic enrolment first applied to SQA if you meet the relevant criteria at that time.
Will I get a refund of contributions made if I opt out of the Pension Scheme?
Yes. If you complete the opt-out process within the relevant timescales specified by NEST (termed 'opt-out window') when they send you the joining information. If you complete this process within the specified timescales you will be removed from the pension scheme. Any payments you have already made will be refunded.
If you want to stop making payments after the opt-out window has closed, you can still do so at any time. The payments you have made already will not be refunded but will be held within your retirement pot with NEST.
As I only carry out work for SQA on an occasional basis, I may only reach the qualifying earnings level once in any year. Why am I being automatically enrolled?
The legislation requires SQA to assess and automatically enrol workers who meet the qualifying earnings criteria in any pay period regardless of how many times your earnings may reach this level in a year. Once you have been automatically enrolled, you will remain a member of the Scheme unless, after careful consideration, you choose to opt out.
What level of contributions will require to be made to the Pension Scheme by me and by SQA?
Contributions are being staged until April 2019 as outlined below:-
| SQA | Your contribution | Tax relief | Total contribution | |
|---|---|---|---|---|
| Up to - 5/4/18 | 1% | 0.8% | 0.2% | 2% |
| From 6/4/18 - 5/4/19 | 2% | 2.4% | 0.6% | 5% |
| From 6/4/19 | 3% | 4% | 1% | 8% |
Will I receive tax relief on my pension contributions?
Yes if you are eligible for tax relief.
Is tax relief given through payroll?
No. Tax relief is given through the pension provider - NEST.
If I don't meet the criteria for automatic enrolment, can I still join the pension scheme?
Yes, you can choose to opt in to NEST if you wish to do so (subject, of course, to meeting the normal requirements for being eligible for membership of the scheme and being under age 75 at the time). To do so, contact payroll in writing by sending a letter, which has to be signed by you. If it is sent electronically, it has to include a statement that you personally submitted the notice to join NEST
.Will SQA make a contribution to the Scheme even if I am not an eligible jobholder and have opted into the Scheme rather than being automatically enrolled?
Under the legislation, all workers will fall into one of three categories as follows:
| Worker Type | Criteria | Employer requirements |
|---|---|---|
| Eligible jobholder | Aged between 22 and under state pension age with earnings of more than the earnings trigger for automatic enrolment (£833* per month) | Automatically enrol Employer contribution required |
| Non-eligible jobholder | Aged 16 and under 75 with earnings of £490* or more per month but less than or equal to £833* per month OR Aged between 16 and under age 22 or between state pension age and under 75 with earnings of more than £833* per month |
Enrol on request Employer contribution required |
| Entitled worker | Aged between 16 and 75 with earnings of less than £486* per month | Enrol on request No employer contribution |
*These figures are the 2017-18 qualifying earnings limits and are subject to change each April.
As a result, if you fall into the non-eligible jobholder category and opt into NEST, SQA will make a contribution. If you fall into the entitled worker category, SQA will not make a contribution.
It isn't worth me being automatically enrolled into the Scheme due to the ad hoc nature of my work and earnings with SQA. I don't want to be in the Scheme - why are you automatically enrolling me?
We are legally obliged to automatically enrol you into the Scheme. If, after careful consideration, you decide to opt out of the Scheme, you can do this.
If I opt out of the Scheme, can I decide to opt back in at a later date?
Yes. You can choose to do this once in any 12 month period.
How do I know how much I will get from this pension when I retire?
It is possible to get an idea of how much you will get from this pension by getting a "pension estimate". You can get this directly from NEST.
What is included within the qualifying earnings to determine eligibility for automatic enrolment?
For fee earners, it is only the fee received in relation to the work undertaken. Any expenses claimed for work undertaken are not included eg travel.
As a fee earner, I do not pay National Insurance and may not pay tax. Why do I have to be enrolled into a Pension Scheme?
This is a completely separate piece of legislation and an individual is assessed on the criteria set out by automatic enrolment and is not linked to criteria for individual tax status.