Pension provision must be offered to all Local Lay Employees, as defined in Standing Orders 570.
The Methodist Conference of 1999 passed a resolution requiring employing bodies to offer a certain level of pension contribution to those that were at that time classified as ‘Lay Workers’. In 2007 Conference subsequently abolished the term ‘Lay Worker’ and the Council in 2008 agreed that it could not simply be substituted as ‘lay employee’, but rather that the 1999 pension guidelines should apply to all lay employees who earn more than the Government’s Lower Earnings Limit.
The current situation is therefore that the following 1999 Conference Resolution applies to all lay employees whose earnings are above the Lower Earnings Limit:
“The Conference requires employing bodies to offer pension provisions to all employed Lay Workers (sic) to whom a new contract of employment is issued under S.O. 438A on the basis of contributions of at least 6% of salary by the employing body and 6% by the Lay Worker (sic). Where the Lay Worker (sic) is not already a member of a suitable pension scheme then the payment should be made into an appropriate money purchase plan. The Conference directs that this requirement shall be published to Employing Bodies as a special term of employment of Lay Employees under S.O.438A (3) (iiA).”
For lay employees earning less than the Lower Earnings Limit it is up to individual employers to decide what arrangements are appropriate.
The Methodist Conference of 2017 passed a resolution requiring employing bodies to offer different levels of pension contribution, from 01 September 2017, as follows:
- the employer level for pension contribution should remain as a minimum of 6% of salary;
- employees should be offered choices, with a minimum level of contribution from them of 2%, to apply to all employees appointed after 1 September 2017;
- local employers should offer any of their employees that have opted out of contributions at 6% the chance to now be enrolled at a level between 2% and 6%;
- local employers should not be allowed to offer these new arrangements to existing employees that are already contributing at the current level of 6%.
What is auto enrolment?
Under the Pensions Act 2008, every employer in the UK must automatically enrol eligible employees into a qualifying pension scheme without any action on the part of the employee. This is called 'automatic enrolment'.
In fact, prior to them being auto enrolled, eligible employees will have no option but to wait and become members of the pension scheme. Only once they have been auto enrolled will employees have the choice to opt out.
This is fundamental to the legislation – employee should have information about the pension before there is an opportunity to opt out.
If a Circuit employs at least one person then the Circuit is an employer and has certain legal duties.
For further information please refer to the Pension Automatic Enrollment - Employers Duties available in this section.
Ongoing monitoring and re-enrollment process
Automatic enrolment is a continuous responsibility – employers must monitor changes in their employees age and earnings to see if they need to be put into your scheme.
Every three years employers must carry out re-enrolment to put back in any staff who have left your scheme.
You will also need to continue paying into your pension scheme, manage requests to join or leave the scheme and keep records.
For detailed guidance please visit the Pensions Regulator website: www.thepensionsregulator.gov.uk
Dos and don'ts
- Do help employees understand when and how auto-enrolment will apply to them, referring them to internal communication documents on the rules or to other sources where you are unable to answer their
- Do treat employees equally whether or not they are members of a qualifying pension scheme.
- Don't induce or encourage an employee to opt-out of a qualifying pension scheme.
- Don't provide new employees with an opt-out form in any joining or HR documents, but you can let them know where they can get an opt-out form (normally from the pension scheme’s managers or administrators).
- Don't base decisions on whether or not employees choose to opt-out of pension auto-enrolment.
- Don't ask job applicants or employees if they would like to opt-out of your pension scheme.
Help from the Pensions Regulator
The Pensions Regulator is the body that regulates work-based pension schemes in the UK. For further information, an extensive document library with resources on the new employer duties is available from the website: www.thepensionsregulator.gov.uk