1. Pension Provision for Local Lay Employees
Under Standing Orders 570, pension provision must be offered to all Local Lay Employees.
Methodist Conference Resolutions
1999 Resolution:
- Employing bodies must offer pension contributions of at least 6% of salary by the employer and 6% by the employee for lay employees earning above the Government’s Lower Earnings Limit.
- If the employee is not already in a suitable pension scheme, contributions should be paid into an appropriate money purchase plan.
- This requirement is a special term of employment under S.O. 438A (3)(iiA).
2017 Resolution (effective from 1 September 2017):
- Employer contribution remains minimum 6%.
- Employees must be offered choices, with a minimum contribution of 2%.
- Employees who previously opted out at 6% should be offered the chance to contribute between 2% and 6%.
- Existing employees contributing at 6% cannot switch to the new lower contribution levels.
2. What is Auto-Enrolment?
Under the Pensions Act 2008, every UK employer must automatically enroll eligible employees into a qualifying pension scheme. This applies to all Methodist employing bodies, including Circuits that employ at least one person.
- Employees cannot opt out before enrolment; they must first be enrolled and then may choose to opt out.
- Employers must provide clear information about the pension scheme before employees have the opportunity to opt out.
Auto enrolment remains a continuous responsibility for an Employer, and it is an area that cannot be ignored and therefore it should be researched and understood.
3. Ongoing Monitoring and Re-Enrolment
Auto-enrolment is a continuous responsibility. Employers must:
- Monitor changes in age and earnings to determine eligibility.
- Re-enrol eligible employees every three years if they previously opted out.
- Continue paying contributions into the pension scheme.
- Manage requests to join or leave the scheme.
- Keep accurate records during and after employment.
For example, it is not uncommon within the Church for multiple employment contracts to exist for one Employee and in these circumstances additional assessment will be necessary to establish if they are separate contracts or if they should be treated as a single employment relationship.
For detailed guidance please visit the Pensions Regulator website: www.thepensionsregulator.gov.uk
Email: customersupport@autoenrol.tpr.gov.uk
4. Dos and Don’ts
✅ Do:
- Help employees understand when and how auto-enrolment applies.
- Refer employees to internal communication documents or official sources if you cannot answer their questions.
- Treat employees equally, regardless of pension scheme membership.
Don’t:
- Induce or encourage employees to opt out.
- Provide opt-out forms in joining or HR documents (direct them to the pension scheme administrator instead).
- Base employment decisions on whether employees opt out.
- Ask job applicants or employees if they would like to opt out.
5. Practical Steps for Compliance
- Identify all Local Lay Employees and confirm earnings against the Lower Earnings Limit.
- Ensure pension contributions meet Methodist Conference requirements and legal auto-enrolment standards.
- Put in place a simple system to track age, earnings, and enrolment status.
- Communicate pension options clearly to employees.
- Schedule re-enrolment checks every three years.
6. 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