Another in my series of posts linked to my very useful meeting with NEST last week (see https://www.jelfgroup.com/blog/2010/12/my-meeting-with-nest-today/).

This one is quite an easy, but important, point for readers to understand.

Understandably, much of the focus on auto-enrolment is around those that MUST be enrolled. So what of those that fall outside of the enrolment criteria?

To understand the issue, you first need to appreciate who must be enrolled. In simple terms, it’s any employee who meet ALL of the following criteria:

• Earns above the lower tax threshold
• Has been in current employment 3 months
• Is over age 22
• Is under State Pension Age (SPA)

The recent paper issued by the Department of Work and Pensions (DWP) ‘Making auto-enrolment work’ (which is only a recommendation paper, but given timescales is likely to be largely adopted without much significant change I suspect), touched on this subject when it mentioned that someone earning above the lower NI threshold, but below the lower tax threshold, could ‘opt in’ to a pension scheme and would benefit from a company contribution.

So what of the others. For instance someone under age 22 who wants to save, or someone working past SPA? The answer appears to be that they too, would qualify for a company contribution. In effect, it appears that the ‘right’ to a company contribution is not limited by the legal requirement to auto-enrolment, as if you fall outside of this criteria you can still benefit from a company contribution. I would stress that I have no paper evidence to support this, but this seems logical assuming the scenario in the above paragraph is adopted.

Don’t panic though. Whilst this will mean that the right to a contribution is pretty much available to anyone with earnings to support this, I really can’t see too many queues forming outside of the HR office of employees wanting to ‘opt-in’. I am sure there will be the odd example (and you do need to appreciate that an employer contribution may be thier legal right in such circumstances), but mainly I expect employees will be content to either remain outside of the enrolment process, or await auto-enrolment where applicable.

Best regards

Steve