Glossary

Worker
  • an employee or
  • a person who has a contract to provide work or services personally and is not undertaking the work as part of their own business.
Jobholder

A worker who:

  • is aged at least 16 and under 75
  • works, or ordinarily works in the UK, and
  • earns above the lower earnings level for qualifying earnings.
  • The category of jobholder further subdivides into 2 groups: ‘eligible jobholders’ and ‘non-eligible jobholders’.
Eligible jobholder

So-called because they are ‘eligible’ for automatic enrolment. This is a jobholder who:

  • is aged at least 22 but has not yet reached state pension age, and
  • earns above the earnings trigger for automatic enrolment.
Non-eligible jobholder

So-called because they are not eligible for automatic enrolment (though they can choose to ‘opt in’ to an automatic enrolment scheme). This is a jobholder who:

  • is aged at least 16 and under 75, and
  • earns above the lower earnings level of qualifying earnings but below the earnings trigger for automatic enrolment.

Or:

  • is aged at least 16 and under 22, or between state pension age and under 75, and
  • earns above the earnings trigger for automatic enrolment.
Entitled worker

A worker who:

  • is aged at least 16 and under 75
  • works, or ordinarily works in the UK, and
  • earns below the lower earnings level for qualifying earnings.
Qualifying earnings

This includes all of the following pay elements (gross):

  • Salary
  • Wages
  • Commission
  • Bonuses
  • Overtime
  • Statutory sick pay
  • Statutory maternity, paternity and adoption pay.

These earnings are used to identify whether an individual is a eligible jobholder or a non-eligible jobholder, and also to determine the level of contributions a scheme must require.

Automatic enrolment

When an employer places eligible jobholders into an automatic enrolment scheme ‘automatically’, ie without the jobholder’s involvement. An individual who is automatically enrolled is free to opt out and can stop saving at any time, but needs to take action to do so.

Qualifying scheme

A pension scheme that meets certain minimum standards set by legislation. There are different standards depending on the type of scheme.

Automatic enrolment scheme

A qualifying scheme that meets additional criteria to be an automatic enrolment scheme. Eligible jobholders who are not already a member of a qualifying scheme on the employer’s staging date must be automatically enrolled into an automatic enrolment scheme. The employer will choose the scheme for automatic enrolment.

Staging

The staggered introduction of the new employer duties, from 2012, starting with the largest employers. New PAYE schemes will be staged last.

Staging date

The date when the new law is ‘switched on’ for a business.

Phasing

For DC schemes, the gradual phasing-in of contribution levels until they reach the minimum level required by law.

Registration

A duty on employers to tell the regulator information about the pension scheme they are using and how many people they have enrolled into it.