(1) For the purposes of this Part a jobholder is a worker—
(a) who is working or ordinarily works in Great Britain under the worker’s contract,
(b) who is aged at least 16 and under 75, and
(c) to whom qualifying earnings are payable by the employer in the relevant pay reference period (see sections 13 and 15).
(2) Where a jobholder has more than one employer, or a succession of employers, this Chapter applies separately in relation to each employment.
(3) Accordingly—
(a) references to the employer are references to the employer concerned;
(b) references to membership of a pension scheme are references to membership in relation to the employment concerned.
(1) If a jobholder is an active member of a qualifying scheme, the employer must not take any action, or make any omission, by which (without the jobholder ceasing to be employed by the employer)—
(a) the jobholder ceases to be an active member of the scheme, or
(b) the scheme ceases to be a qualifying scheme.
(2) Subsection (1) is not contravened if the jobholder remains an active member of another qualifying scheme.
(3) Subsection (1) is not contravened if the jobholder becomes an active member of another qualifying scheme within the prescribed period.
(4) Subsection (1) is not contravened if the action or omission is at the jobholder’s request.
(5) In this Part as it applies in the case of any jobholder, references to a qualifying scheme are references to a pension scheme which is a qualifying scheme in relation to that jobholder (see section 16).
(1) This section applies to a jobholder who—
(a) is aged at least 22, and
(b) has not reached pensionable age.
(2) The employer must make prescribed arrangements by which the jobholder becomes an active member of an automatic enrolment scheme with effect from the automatic enrolment date.
(3) Subsection (2) does not apply if the jobholder was an active member of a qualifying scheme on the automatic enrolment date.
(4) Subsection (2) does not apply if, within the prescribed period before the automatic enrolment date, the jobholder ceased to be an active member of a qualifying scheme because of any action or omission by the jobholder.
(5) For the purposes of arrangements under subsection (2) regulations may require information to be provided to any person by the employer or—
(a) where the arrangements relate to an occupational pension scheme, the trustees or managers of the scheme;
(b) where the arrangements relate to a personal pension scheme, the provider of the scheme.
(6) For the purposes of arrangements made under subsection (2) in relation to a personal pension scheme, regulations may deem an agreement to exist (subject to section 8) between the jobholder and the provider of the scheme for the jobholder to be an active member of the scheme on terms and conditions determined in accordance with the regulations.
(7) The automatic enrolment date, in relation to any person, is the first day on which this section applies to the person as a jobholder of the employer.
(8) In this Part as it applies in the case of any jobholder, references to an automatic enrolment scheme are references to a pension scheme which is an automatic enrolment scheme in relation to that jobholder (see section 17).
(1) The Secretary of State may by regulations provide that in prescribed cases the automatic enrolment date is a date, determined in accordance with regulations under this section, which is later than the date specified in section 3(7).
(2) Where a person becomes an active member of a scheme in accordance with regulations under this section, the employer must not take any action, or make any omission, by which within the minimum period—
(a) the person ceases to be an active member of the scheme, or
(b) the scheme ceases to be a scheme of the relevant kind.
(3) The minimum period is so much of a prescribed period as the person remains a jobholder of the employer.
(4) A scheme ceases to be a scheme of the relevant kind, in the case of any person, if it ceases to have a feature by reference to which regulations under this section operated so as to postpone the automatic enrolment date in that person’s case.
(5) Subsection (2) does not apply to any action or omission at the member’s request.
(1) This section applies to a jobholder who—
(a) is aged at least 22, and
(b) has not reached pensionable age.
(2) The employer must make prescribed arrangements by which the jobholder becomes an active member of an automatic enrolment scheme with effect from the automatic re-enrolment date.
(3) Subsection (2) does not apply if the jobholder was an active member of a qualifying scheme on the automatic re-enrolment date.
(4) Subsection (2) does not apply if, within the prescribed period before the automatic re-enrolment date, the jobholder—
(a) ceased to be an active member of a qualifying scheme because of any action or omission by the jobholder, or
(b) gave notice under section 8.
(5) Subsection (2) is subject to section 6(6).
(6) For the purposes of arrangements under subsection (2) regulations may require information to be provided to any person by the employer or—
(a) where the arrangements relate to an occupational pension scheme, the trustees or managers of the scheme;
(b) where the arrangements relate to a personal pension scheme, the provider of the scheme.
(7) For the purposes of arrangements made under subsection (2) in relation to a personal pension scheme, regulations may deem an agreement to exist (subject to section 8) between the jobholder and the provider of the scheme for the jobholder to be an active member of the scheme on terms and conditions determined in accordance with the regulations.
(8) Automatic re-enrolment dates are dates, after the automatic enrolment date, that are to be determined in accordance with regulations.
(1) Regulations under section 5(8) must either—
(a) secure that for any jobholder there is no automatic re-enrolment date less than three years after the jobholder’s automatic enrolment date, and that there is not more than one automatic re-enrolment date in any period of three years, or
(b) secure that for any employer there is not more than one automatic re-enrolment date in any period of three years.
(2) Subsection (1) does not restrict the provision that regulations may make about the timing of a jobholder’s automatic re-enrolment date (“the relevant date”) in the following cases.
(3) The first case is where the jobholder became an active member of a scheme in accordance with regulations under section 4 and—
(a) at any time before the end of the minimum period under that section, the jobholder ceases to be an active member of the scheme or the scheme ceases to be a scheme of the relevant kind for the purposes of that section,
(b) that event is not the effect of any action or omission by the jobholder or the employer, and
(c) the relevant date is the jobholder’s first automatic re-enrolment date after that time.
(4) The second case is where—
(a) at any time after the jobholder’s automatic enrolment date, the jobholder ceases to be an active member of a qualifying scheme or a qualifying scheme of which the jobholder is an active member ceases to be such a scheme,
(b) that event is not the effect of any action or omission by the jobholder or the employer, and
(c) the relevant date is the jobholder’s first automatic re-enrolment date after that time.
(5) The third case is where—
(a) there is a period beginning at any time after the jobholder’s automatic enrolment date during which the requirements of section 1(1)(a) or (c) are not met (so that the person is not a jobholder for that period), and
(b) the relevant date is the jobholder’s first automatic re-enrolment date after that period.
(6) Where subsection (3) applies—
(a) section 5(2) has effect as if the reference to an automatic enrolment scheme were, in relation to the relevant date, a reference to a scheme (“the new scheme”) of the kind referred to in subsection (3)(a), and
(b) section 4(2) to (5) apply in relation to the new scheme as they applied in relation to the scheme referred to in subsection (3).
(1) This section applies to a jobholder who is not an active member of a qualifying scheme.
(2) But it does not apply at a time when—
(a) arrangements are required to be made under section 3 or 5 in respect of the jobholder, or
(b) the jobholder’s automatic enrolment date is postponed under section 4.
(3) The jobholder may by notice require the employer to arrange for the jobholder to become an active member of an automatic enrolment scheme.
(4) The Secretary of State may by regulations make provision—
(a) about the form and content of the notice;
(b) about the arrangements that the employer is required to make;
(c) for determining the date with effect from which the jobholder is to become an active member under the arrangements.
(5) For the purposes of arrangements under subsection (3) regulations may require information to be provided to any person by the employer or—
(a) where the arrangements relate to an occupational pension scheme, the trustees or managers of the scheme;
(b) where the arrangements relate to a personal pension scheme, the provider of the scheme.
(6) For the purposes of arrangements made under subsection (3) in relation to a personal pension scheme, regulations may deem an agreement to exist (subject to section 8) between the jobholder and the provider of the scheme for the jobholder to be an active member of the scheme on terms and conditions determined in accordance with the regulations.
(7) Subsections (8) and (9) apply where a jobholder becomes an active member of an automatic enrolment scheme in pursuance of a notice under this section and, within the period of 12 months beginning with the day on which that notice was given—
(a) ceases to be an active member of that scheme, and
(b) gives the employer a further notice under this section.
(8) The further notice does not have effect to require the employer to arrange for the jobholder to become an active member of an automatic enrolment scheme.
(9) But any arrangements the employer makes for the jobholder to become, within that period, an active member of such a scheme must be made in accordance with regulations under this section.
(1) This section applies on any occasion when arrangements under section 3(2), 5(2) or 7(3) apply to a jobholder (arrangements for the jobholder to become an active member of an automatic enrolment scheme).
(2) If the jobholder gives notice under this section—
(a) the jobholder is to be treated for all purposes as not having become an active member of the scheme on that occasion;
(b) any contributions paid by the jobholder, or by the employer on behalf or in respect of the jobholder, on the basis that the jobholder has become an active member of the scheme on that occasion must be refunded in accordance with prescribed requirements.
(3) Regulations under subsection (2)(b) may, in particular, make provision about—
(a) the time within which contributions must be refunded;
(b) how the amount to be refunded is calculated;
(c) the procedure for refunding contributions.
(4) The Secretary of State may by regulations make further provision in relation to notices under this section.
(5) The regulations may in particular make provision—
(a) as to the form and content of a notice;
(b) as to the period within which a notice must be given;
(c) as to the person to whom a notice must be given;
(d) requiring any person to make prescribed arrangements for enabling notices to be given;
(e) requiring any person to take prescribed action in consequence of a notice (in addition to any action prescribed under subsection (2)(b)).
(6) The regulations must provide for the notice—
(a) to include information about the effect in relation to jobholders of giving notice under this section, and
(b) to be signed or otherwise authorised by the jobholder.
(1) This section applies to a worker—
(a) to whom paragraphs (a) and (b) of section 1(1) apply (working in Great Britain and aged between 16 and 75),
(b) to whom paragraph (c) of section 1(1) does not apply (qualifying earnings), and
(c) who is not an active member of a pension scheme that satisfies the requirements of this section.
(2) The worker may by notice require the employer to arrange for the worker to become an active member of a pension scheme that satisfies the requirements of this section.
(3) The Secretary of State may by regulations make provision—
(a) about the form and content of the notice;
(b) about the arrangements that the employer is required to make;
(c) for determining the date with effect from which the worker is (subject to compliance with any requirements of the scheme) to become an active member under the arrangements.
(4) Subsections (5) and (6) apply where a worker becomes an active member of a pension scheme in pursuance of a notice under this section and, within the period of 12 months beginning with the day on which that notice was given—
(a) ceases to be an active member of that scheme because of any action or omission by the worker, and
(b) gives the employer a further notice under this section.
(5) The further notice does not have effect to require the employer to arrange for the worker to become an active member of a pension scheme.
(6) But any arrangements the employer makes for the worker to become, within that period, an active member of a pension scheme that satisfies the requirements of this section must be made in accordance with regulations under this section.
(7) A pension scheme satisfies the requirements of this section if—
(a) it is registered under Chapter 2 of Part 4 of the Finance Act 2004 (c. 12), and
(b) in the case of a personal pension scheme, there are, in relation to the worker concerned, direct payment arrangements (within the meaning of section 111A of the Pension Schemes Act 1993 (c. 48)) between the worker and the employer.
(1) The Secretary of State must make provision by regulations—
(a) for all jobholders to be given information about the effect of sections 2 to 8 in relation to them;
(b) for all workers to whom section 9 applies to be given information about the effect of that section in relation to them;
(c) for a prescribed person to be required to provide the information.
(2) Regulations under this section must state—
(a) what information must be given;
(b) in what circumstances it must be given;
(c) how and when it must be given.
(1) The Secretary of State may make regulations requiring employers to provide the Pensions Regulator (“the Regulator”) with information about action they have taken or intend to take for the purposes of any provision of, or of regulations under, sections 2 to 10.
(2) The regulations may in particular—
(a) require an employer to provide information about pension schemes to which any action relates;
(b) require an employer to identify which of any prescribed descriptions a scheme falls within;
(c) require an employer to provide information that appears to the Secretary of State to be required for the performance by the Regulator of its functions under Chapter 2 of this Part;
(d) make provision about how and in what form any information is to be provided.
The Secretary of State may by regulations provide that sections 2 to 9 do not apply in the case of an employer of any description until such date after the commencement of those sections as is prescribed in relation to employers of that description.
(1) A person’s qualifying earnings in a pay reference period of 12 months are the part (if any) of the gross earnings payable to that person in that period that is—
(a) more than £5,035, and
(b) not more than £33,540.
(2) In the case of a pay reference period of less or more than 12 months, subsection (1) applies as if the amounts in paragraphs (a) and (b) were proportionately less or more.
(3) In this section, “earnings”, in relation to a person, means sums of any of the following descriptions that are payable to the person in connection with the person’s employment—
(a) salary, wages, commission, bonuses and overtime;
(b) statutory sick pay under Part 11 of the Social Security Contributions and Benefits Act 1992 (c. 4);
(c) statutory maternity pay under Part 12 of that Act;
(d) ordinary statutory paternity pay or additional statutory paternity pay under Part 12ZA of that Act;
(e) statutory adoption pay under Part 12ZB of that Act;
(f) sums prescribed for the purposes of this section.
(1) The Secretary of State must in each tax year determine whether the amounts in section 13(1)(a) and (b) have maintained their value.
(2) The Secretary of State must in particular make a determination under subsection (1) by reference to a review under section 148 of the Social Security Administration Act 1992 (c. 5) (review of general level of earnings for revaluation of earnings factors).
(3) If the Secretary of State determines under this section that the amounts in section 13(1)(a) and (b) have not maintained their value, the Secretary of State must make an order substituting in those provisions the amounts that the Secretary of State considers appropriate for maintaining their value.
(1) In relation to any person a pay reference period is the period prescribed.
(2) The Secretary of State may by regulations—
(a) make provision for determining a person’s earnings in any pay reference period;
(b) make provision for determining the first date of each pay reference period in relation to a person.
(3) A reference in any provision to the relevant pay reference period is a reference to the period determined in accordance with regulations under this section, as they apply for the purposes of that provision in the case concerned.
(1) A pension scheme is a qualifying scheme in relation to a jobholder (J) if—
(a) the scheme is an occupational pension scheme or a personal pension scheme,
(b) the scheme is registered under Chapter 2 of Part 4 of the Finance Act 2004 (c. 12), and
(c) while J is an active member, the scheme satisfies the quality requirement in relation to J.
(2) The Secretary of State may by regulations provide that subsection (1)(b) does not apply in relation to a scheme to which section 25 or 27 applies, if prescribed requirements are satisfied.
(3) The Secretary of State may by regulations provide that a scheme is not a qualifying scheme in relation to J if—
(a) while J is an active member, the payments that must be made to the scheme by, or on behalf or in respect of, J for purposes other than the provision of benefits exceed a prescribed amount,
(b) while J is an active member, the contributions that must be paid to the scheme by, or on behalf or in respect of, J exceed a prescribed amount, or
(c) the scheme provides for average salary benefits to be provided to or in respect of J and contains prescribed features.
(1) A pension scheme is an automatic enrolment scheme in relation to a jobholder (J) if—
(a) it is a qualifying scheme in relation to J,
(b) it satisfies the conditions in subsection (2), and
(c) it satisfies any further conditions prescribed.
(2) The conditions mentioned in subsection (1)(b) are that—
(a) no provision of the scheme prevents the employer from making arrangements prescribed by regulations under section 3(2), 5(2) or 7(4) for J to become an active member of the scheme;
(b) no provision of the scheme requires J to express a choice in relation to any matter, or to provide any information, in order to remain an active member.
For the purposes of this Part, each of these is an occupational pension scheme—
(a) an occupational pension scheme within the meaning of section 1(1) of the Pension Schemes Act 1993 (c. 48) that has its main administration in the United Kingdom;
(b) an institution for occupational retirement provision within the meaning of Article 6(a) of the IORP Directive, that has its main administration in an EEA State other than the United Kingdom;
(c) a pension scheme that is prescribed or is of a prescribed description and that has its main administration elsewhere than in an EEA State.
For the purposes of this Part, a personal pension scheme is a pension scheme that is not an occupational pension scheme.
(1) A money purchase scheme that has its main administration in the United Kingdom satisfies the quality requirement in relation to a jobholder if under the scheme—
(a) the jobholder’s employer must pay contributions in respect of the jobholder;
(b) the employer’s contribution, however calculated, must be equal to or more than 3% of the amount of the jobholder’s qualifying earnings in the relevant pay reference period;
(c) the total amount of contributions paid by the jobholder and the employer, however calculated, must be equal to or more than 8% of the amount of the jobholder’s qualifying earnings in the relevant pay reference period.
(2) The Secretary of State may by regulations provide that, where a certificate has been issued under section 7(1) of the Pension Schemes Act 1993 stating that the employment of the jobholder is contracted-out employment by reference to the scheme, paragraphs (b) and (c) of subsection (1) have effect with prescribed modifications.
(3) A scheme does not fail to satisfy the quality requirement under this section merely because the trustees or managers of the scheme may on any occasion refuse to accept a contribution below an amount prescribed for the purposes of this section on the grounds that it is below that amount.
(1) Subject to subsection (3), a defined benefits scheme that has its main administration in the United Kingdom satisfies the quality requirement in relation to a jobholder if the jobholder is in contracted-out employment.
(2) A defined benefits scheme that has its main administration in the United Kingdom satisfies the quality requirement in relation to a jobholder who is not in contracted-out employment if it satisfies the test scheme standard in relation to that jobholder.
(3) The Secretary of State may by order provide that a scheme does not satisfy the quality requirement in relation to a jobholder who is in contracted-out employment unless it satisfies the test scheme standard in relation to that jobholder, with the substitution of a higher fraction, not exceeding 1/80th, for the fraction of 1/120th in section 23(4)(a).
(4) In relation to any scheme, a jobholder is in contracted-out employment for the purposes of this section and section 22 if a certificate has been issued in respect of the jobholder under section 7(1) of the Pension Schemes Act 1993 (c. 48) stating that the employment of the jobholder is contracted-out employment by reference to the scheme.
(1) A scheme satisfies the test scheme standard in relation to a jobholder (J) if the pensions to be provided for the relevant members of the scheme are broadly equivalent to, or better than, the pensions which would be provided for them under a test scheme.
(2) Subject to subsection (3), the relevant members are J and—
(a) if J is not in contracted-out employment, all active members who are not in contracted-out employment and are jobholders of the same employer as J;
(b) if J is in contracted-out employment, all active members who are in contracted-out employment and are jobholders of the same employer as J.
(3) In applying this section the pensions to be provided for relevant members must be considered as a whole.
(4) The Secretary of State may by regulations make provision for the manner of, and criteria for, determining whether the pensions to be provided for the relevant members under a scheme are broadly equivalent to, or better than, the pensions which would be provided for them under a test scheme.
(5) Regulations under subsection (4) may provide for the determination to be made in accordance with guidance issued from time to time by the Secretary of State.
(6) The Secretary of State may by regulations provide that a scheme only satisfies the test scheme standard if the scheme actuary certifies that it does.
(7) Except in prescribed circumstances, the scheme actuary is the actuary appointed under section 47(1)(b) of the Pensions Act 1995 (c. 26) (professional advisers) in relation to the scheme.
(1) A test scheme is an occupational pension scheme which satisfies—
(a) the requirements of subsections (2) and (4), and
(b) any prescribed requirements.
(2) The scheme must provide for a member to be entitled to a pension commencing at the appropriate age and continuing for life.
(3) The appropriate age is 65 or any higher age prescribed.
(4) The annual rate of the pension at that age must be—
(a) 1/120th of average qualifying earnings in the last three tax years preceding the end of pensionable service,
multiplied by
(b) the number of years of pensionable service, up to a maximum of 40.
(5) Section 13(1) (qualifying earnings) applies for the purposes of this section as if the reference to a pay reference period were a reference to a tax year.