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Do we need to amend our employment contracts?

Strictly speaking, an employer does not need to amend employment contracts in order for auto enrolment to affect staff, because the workplace pension’s legislation will be overriding.

However, assuming that a full information exercise will be undertaken with employees, this might be an opportune time to also amend contracts so that the principles of workplace pensions are crystal clear and the employer does not get, for example, (however unwarranted) complaints for breach of contract over the deduction of pension contributions from salary.

It should be noted that if the minimum member contributions are deducted in order to comply with workplace pension legislation then the deduction would actually be lawful, notwithstanding the provisions of an employee’s contract and any claim in this regard would fail.

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With the introduction of workplace pensions already underway for a number of larger businesses in the UK, it’s important that you act now and start preparing – there’s a lot that can be put in place earlier.

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