As an employer, you have legal responsibilities to ensure you comply with workplace pension regulations. This guide explains your key duties and the risks of non-compliance.

Automatic enrolment was introduced to make sure that all eligible workers have access to a workplace pension, helping them save for their retirement. It’s a key benefit that can significantly improve an individual’s pension income when they retire.

As an employer, your responsibilities around workplace pensions are:

While these tasks may seem challenging, PayFit is designed to help you stay on top of your automatic enrolment and re-enrolment duties, saving you time and keeping you compliant.

While there's no deadline for selecting a scheme, you'll need to choose one before your legal duties start. Setting up the scheme can take time, so plan ahead to ensure you're ready to meet your automatic enrolment duties.

For more information about what to consider when choosing a pension scheme, please refer to our Help Centre article.

Next, you’ll need to work out which of your employees qualify for automatic enrolment.

If they are:

They must be enrolled into the pension scheme.

For more detailed information, please refer to our Help Centre article.

You must inform your staff about their eligibility and any changes to the workplace pension scheme, including if you choose to postpone their enrolment. You have six weeks from your duties start date to notify:

You must declare your compliance within five months of your legal duties start date. This is a formal confirmation of how you’ve met your pension responsibilities.

For more information about your declaration of compliance, please refer to our Help Centre article.

If workers opt-out of the workplace pension, you have a legal duty to re-enrol them every three years if they meet the eligibility criteria at that time. They can opt out again after their first contribution has been taken.

The Pensions Regulator enforces compliance, and there are four stages if an employer fails to meet their duties:

The Regulator may contact you via email, letter, phone, or in person to offer advice on how to become compliant.

A formal notice instructing the employer to comply. If contributions haven’t been paid, the employer may be required to pay both their own and their employees’ missed contributions, along with any penalties due to late payment.

This is formal action taken against employers who consistently or deliberately fail to comply. Employers risk a fixed fine of £400, with the potential for escalating penalties (ranging from £50 to £10,000 per day, depending on the size of the workforce) if compliance isn’t met.

A civil penalty notice, which ranges from a flat £5,000 to a flat £50,000 can be sanctioned where employers have failed to invest pension contributions in their scheme.

If an employer doesn’t pay their penalty, court action may follow, potentially leading to prosecution.

For more information about the four stages, please refer to The Pension Regulator's guidance.