What is a "qualifying scheme" under the pensions auto-enrolment provisions?
A "qualifying scheme" is a pension scheme that an employer can use for automatic enrolment. The scheme can be a scheme that is registered with HM Revenue and Customs for UK tax purposes or, if the scheme is not based in the UK, it must satisfy additional criteria. Whichever scheme the employer uses, it must satisfy minimum "quality standards". These differ, depending on whether the scheme is a defined-contribution or defined-benefit scheme.
Schemes that are hybrid schemes (ie schemes that provide a mixture of defined-benefit and defined-contribution benefits) need to be assessed to ascertain whether the defined-benefit or defined-contribution quality standards apply to them. Specific requirements apply to defined-contribution schemes that are personal pension schemes.
There are a number of schemes that meet the qualifying criteria and are available in the market place for small employers. The National Employment Savings Trust (Nest) is the central scheme set up by the Government for this purpose.
See the Pensions Regulator's detailed guidance on Pensions schemes for further information about the standards that a scheme must meet to be a qualifying scheme.