Pension Auto-Enrolment – Frequently Asked Questions
In a move to encourage greater long-term saving of the UK population towards their retirement, new legislation (The Pensions Act 2008) will require the University to automatically enrol people into a pension scheme if they are not already in one. The aim is to help more people have another income, on top of the State Pension, when they retire.
The legislation is being phased in over the coming years with the largest employers needing to comply from October 2012. The University will be covered by the new requirement from April 2013 (this is known as our ‘staging date’).
Here are a few key points:
- The University must prepare for all relevant employees to be enrolled in a qualifying scheme in April 2013.
- For all employees who are currently active members of one of the University’s pension schemes there will be no change and no action will be required,
- For some other employee groups who do not currently pay into a pension scheme, (including casuals and temporary staff), the University will be required, by law, to enrol them into a scheme after assessment.
The law does not require every employed person to be automatically enrolled into a pension scheme – it depends on age and earnings. For employees who are not enrolled automatically, the University has to provide the opportunity to opt in to a scheme.
Any member of staff, once enrolled, may elect to opt out of the scheme. Every three years, the University will be required to re-enrol all eligible staff who, at that time, are not members of a pension scheme, even if you have previously opted out.
If you are not a member of the workplace pension scheme, the University is required under the legislation to make an assessment against a set of criteria, and inform you in advance as to whether you will be automatically enrolled:
An ‘eligible job holder’ must be aged 22 or over but no more than State Pension Age, and must have earnings over £8,105 pa at current rates (£675.42 per month). You will be automatically enrolled into a workplace pension scheme.
Even if you do not meet the criteria to be an ‘eligible job holder’, you will meet the criteria to be a ‘non-eligible job holder’ if you are aged between 16 and 74 with earnings between £5,564 and £8,105 (£463.67 - £675.42 per month), or you earn over £8,105 but are aged between 16 and 21 or State pension Age and 74. You will have the option to enrol in a workplace pension scheme.
If you do not fall into either of these categories, and you are aged between 16 and 74 with earnings below £5,564 (£463.42 per month), you will be an ‘entitled worker’ and will have the right to join a workplace pension scheme.
The qualifying earnings thresholds will be reviewed by the Government periodically.
No, your membership will continue as previously.
The scheme rules do not allow us to apply transitional arrangements to people who have previously opted out of USS. All eligible employees who have previously opted out of USS will therefore be assessed and if required auto-enrolled into the scheme at 1st April 2013. We will write to you when you have been assessed to let you know the outcome.
If you wish to stay in the scheme, you will not need to do anything and we will start to deduct contributions to your pension from your April salary. If you wish to opt out of the scheme, you will need to do this direct with USS after 1st April 2013. We will write to you if you are in this category, with full details.
We are able to apply transitional arrangements to people who have previously opted out of LGPS. We will therefore, continue to treat them as though they do not wish to be members of the scheme until 2017.
If you want to join the Local Government Pension Scheme, follow one of the methods outlined below:
- Send a letter, signed by you, to 'Pensions - Payroll & Pensions Office, Hazlerigg, Loughborough University, Loughborough, Leicestershire, LE11 3TU'.
- Send an email with your request containing the phrase “I confirm I personally submitted this notice to join a workplace pension scheme” to
We will contact you with further details.
If you have a contract within grades 1 – 5 and are eligible for LGPS, you will not be affected.
If you have a contract grades 6 or above and are eligible to join USS you will be subject to auto-enrolment. You will be auto-enrolled into the scheme after 1st April 2013 into the Career Re-valued Benefit section of the scheme. Pension contribution rates will be based on age at re-joining (13.9% - 19.4%).
We will write to you and let you know that this has happened. If you wish to stay in the scheme, you will not need to do anything and we will start to deduct contributions to your pension from your salary. If you wish to opt out of the scheme, you will need to do this direct with the scheme after your membership has commenced. We will write to you if you are in this category, with full details.
Once enrolled in a workplace pension scheme you are member of that scheme unless you notify the scheme that you wish to leave.
Individual communication will be sent to each Loughborough University employee explaining how pension reform will affect you.
General information is available from:
Loughborough University offers two main current workplace pension schemes:
Local Government Pension Scheme - this is available to staff on Grades 1 to 5, and is now extended to include casual employees on an equivalent pay rate.
Universities Superannuation Scheme (USS) - this is available to staff on Grades 6 and above, including casual employees. New members of the scheme will be entered in to the Career Re-valued Benefit section of the scheme. Employees with previous membership of the scheme will be eligible for Final Salary (FS) See section above for re-employed pensioners.
No. As previously stated, the workplace pension scheme offered will depend on your job family.
Your pension contribution will be deducted from your salary and shown on your payslip. The cost of your contribution will depend on the workplace scheme and your current earnings level. Current contribute rates are:
Local Government Pension Scheme (LGPS) employee contributions are based on earnings bands and vary from 5.5% to 7.5%, and the University (employer) contribution from 1st April 2013 is 17.9%
Universities Superannuation Scheme (USS) employee contribution Career Re-valued Benefit rate 6.5%, Final Salary 7.5% and the University (employer) contribution is 16%. Employee contribution rates for returning retirees are higher. Your pension provider can provide more detailed information about your scheme, the potential benefits and the rules.
Where you hold more than one concurrent contract with the University, the level of your aggregated earnings and the duration of your contract will be a key determinant of whether you are automatically enrolled. The scheme or schemes offered to you will depend on your contract.
If you are required to submit claims, prompt submission ensures you are paid the appropriate amount each month. If you submit time sheets late, which cover more than one month, you will be paid for this work in a single aggregate amount. This may generate an earnings spike and activate auto-enrolment into a workplace pension scheme. Pension contributions will be automatically deducted from your pay at that point.
Studentships are not classed as paid employment, so will not be pensionable. If a student undertakes casual work, paid through the University payroll then this will be assessed under auto enrolment.
These are exempt from auto enrolment as these are not University employees.