On 1 October 2012, the government introduced ‘automatic enrolment’. Automatic enrolment means that as an employer of the Local Government Pension Scheme (LGPS), you must automatically enrol certain members of your workforce into the pension scheme.
- Under automatic enrolment, any employee under the age of 75 with a contract of employment of at least 3 months will be automatically enrolled into the LGPS whether they wish to join or not.
- Members have a right to opt out of the LGPS and will be able to so after they have been auto enrolled and not before.
- Members who have opted out of the scheme will be auto enrolled every three years in line with your re-enrolment process.
- Employers with staff eligible for the LGPS are not able to offer any other pension scheme to their employees – this means that the government initiated NEST (National Employment Savings Trust) scheme is not available to eligible LGPS employees.
All employers need to act to comply with the law and adhere to your duties to encourage more people to save for a longer retirement.
Please see The Pensions Regulator website for more information including the current automatic enrolment thresholds, ongoing duties and what you need to do for re-enrolment.
Please also refer to The Local Government Associations website which provides an employer’s guide to automatic enrolment from the perspective of the LGPS and the Teachers’ Pension Scheme along with some sample letters.
Automatic enrolment earnings bandings
LGPC Bulletin 182 contains the earnings bandings for 2019/20. The earnings trigger of £10,000 for 2019/20 is unchanged since 2015/16.
Automatic enrolment and transitional delay update
The Local Government Association has released an update in the Local Government Pensions Committee Bulletin 163 to confirm that the Department for Work and Pensions agrees with The Pensions Regulator’s (TPR) guidance.
In their view, where an eligible jobholder has been subject to transitional delay, the start date for active membership is the day after the end of the transitional delay.
New automatic enrolment brief guide
A new version of the automatic brief guide (version 7.0) has been uploaded to the LGPS Regulations and Guidance website. The new guide aims to supplement the information provided by The Pensions Regulator (TPR).
It covers automatic enrolment from the perspective of the LGPS and the Teachers’ Pension Scheme and contains signposts to the detailed guidance available on TPR’s website.
Automatic enrolment thresholds
Every year, the DWP reviews the earnings thresholds for automatic enrolment. You can find the earnings thresholds for the current tax year broken down by pay frequency, plus the historic earnings thresholds starting from when the law was introduced in the 2012/2013 tax year.
Flowcharts and template letters
You can find useful flowcharts and template letters to help you to notify your employees of the changes in the Local Government Pension Committee Guide.
There is also an employee’s guide to the LGPS.