AUTOMATIC ENROLMENT

What is an ‘eligible employee’?

In Caterpillar, we contractually enrol all our employees over the age of 18. You will be enrolled on the first day of your employment with Caterpillar. Your first contribution to your pension will be taken on your first pay date after you start working for Caterpillar. If you opt out of the Plan, but you meet the requirements for automatic enrolment, you will be re-enrolled in line with AE regulations.

Under the AE regulations, an eligible employee is someone who works in the UK, is aged between 22 and State pension age, and earns more than £10,000 a year.

If you’re not an eligible employee, you can still ask to join a pension through Caterpillar.

What is automatic enrolment?

Automatic enrolment (AE) is a law that says all UK employers must put their eligible employees into a workplace pension scheme if they are not already in one. Employees can then opt out if they want to. Under the rules of automatic enrolment, eligible employees who opt out must be re-enrolled every three years.

What happens when I am automatically enrolled?

You will get a letter confirming that you have been automatically enrolled. This letter will give you all the details about how your plan works, including how to opt out if you do not want to start saving for your retirement just yet. If you opt out within one month of being automatically enrolled, you will get a refund of your first contribution.

However, if you opt out after this one-month window, your money will remain in the pension plan (or another registered pension scheme, if you decide to transfer it) until you are at least 55. This is the minimum retirement age and is set by the Government. (The Government plans to raise the minimum retirement age to 57 from 2028.)

Also, please remember that under the rules of automatic enrolment, Caterpillar must re-enrol you into a workplace pension plan every three years if you are an eligible employee. You will be able to opt out then too.

How much will I pay if I am automatically enrolled?

The Government has set a minimum employee contribution as part of its automatic enrolment regulations (5% of Pensionable Earnings from April 2019).

The letter you get when you are automatically enrolled will set out what your contributions are, which may be higher than the minimum set by the Government, depending on which pension plan you are enrolled into.

The minimum contribution that Caterpillar has to pay is 3% of Pensionable Earnings from April 2019. However, Caterpillar pays more than the minimum amount demanded under the regulations.

What pension will I be enrolled into?

Caterpillar uses two pension plans to fulfil its automatic enrolment duties, depending on where the eligible employees are based:

• If you work on the UK mainland or in Northern Ireland, you would be automatically enrolled into the DC Pension Plan
• If you work for Progress Rail, you would be automatically enrolled into the Aviva Group Personal Pension Plan (GPP)