Automatic enrolment means that once an employer has passed their staging date it is required to automatically enrol eligible jobholders into a scheme with effect from the date they become eligible, unless they are already a member of the employer's pension scheme. Both of these schemes meet certain quality requirements.
Contractual enrolment is an alternative approach to enrolment which can be used to meet the employer's obligations under the automatic-enrolment regime, but is contained within a contract of employment and does not depend on the employee being an eligible jobholder for the purposes of auto-enrolment.
What are the advantages of contractual enrolment?
The main advantage for an employer of using contractual enrolment is that it will not be necessary to assess the individual auto-enrolment status of each new employee at the outset of the employment relationship. To avoid enrolling new joiners who are short-term workers or likely to leave employment at an early stage, the employer can also use a period of postponement of up to three months.