Glossary
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Assessment date

This is the date on which an individual employee is assessed for their auto enrolment category. An employee may have multiple assessment dates as their circumstances change, and an assessment date can be postponed by up to 3 months.

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Auto enrolment

This is a Government initiative to help more people save for later life through a pension scheme at work. 

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Auto enrolment category

The category an employee falls into after they have been assessed for auto enrolment. The categories are: Eligible jobholder, Non-eligible jobholder and Entitled worker. Some employees may also fall outside the legislation, and would not fall into any of these categories.

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Banded Earnings

This refers to the portion of any salary between the Lower Earnings Limit and the Upper Earnings Limit. This is also know as Qualifying Earnings.

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Basic salary

The normal annual salary excluding bonuses, overtime or any other additional payments.

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Deferral date

If automatic enrolment is postponed, this is the name for the new, delayed date for staging. It is also sometimes known as the postponement date. Employees must be notified of the Deferral Date if automatic enrolment is postponed.

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Eligible jobholder

An employee aged between 22 and the State Pension Age who earns above £10,000 per annum. These workers should be automatically enrolled into a pension scheme. They can choose to opt out.

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Entitled worker

An employee aged between 16 and 75 who earns below the Lower Earnings Limit. These workers do not have to be enrolled into a pension scheme. They can choose to join the scheme. The employer would not have to contribute to the pension scheme.

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FCA (Financial Conduct Authority)

The governing body for pensions in the UK - however, the FCA does not regulate auto enrolment pensions. These are regulated by The Pensions Regulator.

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First Pound

This is an alternative way of saying ‘total salary’. Pensions calculated ‘from the First Pound’ include all of an employee’s earnings in the contribution.

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IFA

This stands for Independent Financial Advisor. These are individuals or companies authorised by the FCA to provide advice about pensions and other financial matters.

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Inducement

An attempt to persuade employees to opt out of the pension scheme by the employer. This is illegal, and carries its own set of fines for employers based on the number of employees affected.

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Lower Earnings Limit

A limit set by the government - this is the least that an employee can earn before they qualify for certain statutory entitlements and is also the point at which Qualifying Earnings can begin.

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Non-eligible jobholder

An employee aged between 16 and 22 who earns more than the Lower Earnings Limit OR an employee aged between the State Pension Age and 75 who earns more than the Lower Earnings Limit OR an employee aged between 22 and State Pension Age who earns between the Lower Earnings Limit and the Tax Free Allowance. These workers do not have to be enrolled into a pension scheme. They can choose to join the scheme. The employer would have to contribute to the pension scheme.

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Opting in

Joining the pension scheme if you have previously opted out or were not enrolled in the first place. Most employees will have the right to opt in to the pension scheme.

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Opting out

Officially this means leaving the pension scheme within the ‘opt out’ period, however it is often also applied to anybody who leaves the pension scheme. Opting out within the opt out window means that any contributions which have been made to the pension are refunded and it is as though the employee was never a member of the scheme. The NEST opt out window is 28 days. Any employee who opts out will be recategorised every 3 years and automatically enrolled again into the pension if they qualify.

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Opt out period

A period of a month from the date when the employee has both been automatically enrolled into the pension scheme and received all regulatory information. If the employee opts out within this month then they would have all contributions refunded and it would be as though they were never a member of the scheme.

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Pensionable Earnings

The amount of salary that the pension contributions are calculated on. This could be Qualifying Earnings, Total Salary or Basic Salary depending on the pension scheme and what the employer setting up the pension decides.

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The Pensions Regulator (TPR)

The governing body for auto enrolment in the UK. It has the power to levy fines and warnings against businesses who are not complying with the legislation. When you sign up to Enable Autoenrol we will act as your agent with TPR, meaning we will register you with TPR and re-register you every three years as long as you remain an Enable Autoenrol subscriber.

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Postponement

If automatic enrolment is deferred, this is the name for the new, delayed date for staging. Employers can postpone for up to 3 months. It is also sometimes known as the Deferral Date. Employees must be notified of the Postponement Date if automatic enrolment is postponed.

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Postponement date

Another way of saying Deferral date

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Prohibited Behaviour (in the context of auto enrolment)

Creating a job advert that implies that the position will not be open to those wishing to opt in to an AE pension scheme or implying the same during any part of the recruitment process. This is illegal and carries the same fines as inducement.

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Qualifying Earnings

This refers to the portion of any salary between the Lower Earnings Limit and the Upper Earnings Limit.

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Staging Date

This is the date on which AE obligations will apply to a company. It is defined by the company’s size and PAYE scheme number. This can be postponed by up to 3 months. You can find out your Staging Date on the Pensions' Regulator website here (you will need to know your PAYE scheme number)

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State Pension Age

The age at which a person may start to claim the State Pension. This is currently increasing for both men and women and is likely to reach 70 by the 2040s. It will be 66 for both men and women by the end of 2020.

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Total Salary

The full amount that the employee is paid for their work, including any bonuses, overtime or additional payments.

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Upper Earnings Limit

A limit set by the government - this is the highest point at which an employee pays National Insurance contributions on their salary. It is also the upper limit for Qualifying Earnings.

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