Pension schemes and employer contributions

A pension is money you’ll use to live on when you retire. Most people get a state pension from the government which covers your basic needs. However, your employer has to offer a workplace pension scheme by law. They have to automatically enrol anyone who’s eligible – this is called automatic enrolment.

What do I need to do if a person has their own pension and the company contributions to be paid into this?

An employee may request to contribute to a personal pension scheme, rather than a company scheme. Generally, most UK employers will be amenable to this and the processes generally will be identical from one provider to another.

Pension contributions must be made by direct debit, and a UK based GBP bank account is required for this to be processed.

First pay-run – what do we need to know?

If this is the first time for a company pay-run, then you will need to auto-enrol the employee(s) into a compliant pension scheme.

If an employee advises that they have a personal scheme and would like contributions to be made to this scheme, then this is acceptable. However, care must be taken to ensure that the personal scheme is auto-enrolment compliant, otherwise the company will be in breach of the obligations.

This assumes there is only one employee. If there are additional employees, or the company takes on further members of staff, then a compliant scheme must be set up.

It is possible to defer auto-enrolment. This is known as the postponement. A company can take the decision to postpone for a period of up to three months.

What do we need to be aware of for a personal scheme?

Under legal obligations, an employer must have paid over any deductions made to an employee’s pay within no later than the 22nd day (19th if you pay by cheque) of the next month.

Payroll is calculated, and pension contributions from the employer and employee are deducted.

Generally, the employee will liaise with their provider that their new employer is willing to contribute to their existing pension.

The employee informs the provider, and an appropriate pension form is issued. Details of the scheme, contributions – including percentages and any post-dated contributions are captured. The form is then signed by the employer/authorised bank signatory agreeing to regular monthly contributions.

It may be that there is a one-off, backdated contribution to be processed. Occasionally this will be a manual payment to the pension provider, rather than by regular direct debit.

The form is then processed by the provider, and regular contributions are processed going forward.


Upon the third year anniversary of your staging date (usually set by the date of payroll registration), you must re-enrol your employees into a pension scheme. Find out more about the obligations for re-enrolment here.

For more information on company pension schemes, please click here.