Since the introduction of automatic enrolment under the Pensions Act 2008, all employers in the UK, including parish councils, must:

Automatically enrol eligible staff into a workplace pension

This applies to employees who:

Are aged between 22 and State Pension age

Earn over £10,000 a year (approx. £833/month)

Work in the UK

Pay employer pension contributions

You must contribute at least 3% of qualifying earnings, and the employee contributes 5%, making a total minimum of 8%.

Declare compliance to The Pensions Regulator

When you employ staff, you need to confirm you’ve met your legal duties, including setting up a pension and enrolling eligible staff.

Even if no one qualifies for auto-enrolment (e.g. part-time staff on low earnings), you must still complete a declaration of compliance.

As a parish council, there are two main pension routes you might be using or considering:

1.        Local Government Pension Scheme (LGPS)

Many councils offer the LGPS, especially if using the NALC model contract, which refers to this scheme as the default.

The LGPS is a defined benefit pension scheme, meaning:

Employees receive a guaranteed income in retirement based on their pay and length of service

The scheme is backed by government and managed locally by administering authorities (e.g. county councils)

Employer contributions are significantly higher than standard workplace pensions

You must apply to your local LGPS administering authority to join, membership isn’t automatic.

2.        Standard Workplace Pension (e.g. NEST, The People’s Pension)

These are defined contribution schemes, which:

Are set up by the employer (often through payroll software)

Build a pension pot from employee and employer contributions, which the employee accesses at retirement

Depend on investment performance—no guaranteed outcome

These schemes are fine for smaller councils or those with casual, part-time or temporary staff, but it's important to manage expectations.

3.        Things to Check

As a council, you should:

Know what pension scheme(s) you are offering

Ensure your payroll provider is making correct deductions

Regularly review your contracts of employment – especially those referring to LGPS or enhanced benefits

Keep your Pensions Regulator compliance up to date (re-declaration is required every 3 years)

 

The pension scheme you offer is an important part of your staff’s overall reward package. While the LGPS is more generous and often expected in local government roles, it comes with higher costs and admin. A standard workplace pension still meets your legal duties but may not be suitable for all employees, especially full-time or long-serving staff.

If you’re unsure whether your council is meeting its pension obligations or you’re considering switching or joining LGPS, please speak to your payroll provider or local pension authority.

And as always, make sure your employment contracts and policies reflect the pension arrangements you have in place.