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Auto enrolment postponing

Auto enrolment postponing

I have a client who pays monthly wages on 10th of the month for hours done during the previous calendar month.  His staging date is 1st June 2016 but he is intending to postpone for 2-3 months to a date that will align with the monthly payroll.  I am unsure as to the date he would need to postpone to in order to end up with a full months pension - would 10th August achieve this as this would be the payday or am I misinterpreting the rules?  Any comments or suggestions would be appreciated.

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By NYB
18th Feb 2016 16:04

Postponement AE

I have a client exactly the same - same pay day, and same staging day as well. I worked out that you can postpone until 10th August. You can't go beyond 31st August. So that will be the start day.. I have run my test payroll through and it accepts that.

Mind you I hadn't even thought of it. I was just going to  go with 1st September. The pension is calculated on a months wages so the pay date doesn't come into it - does it?

Clarity please from anyone.

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18th Feb 2016 21:21

Hopefully?

This is my understanding, but happy to be corrected.

Subject always to the actual pension scheme rules:

For assessment, based upon a postponed date of say 1 August, you can chose to look at the tax month PRP of 6.7.16-5.8.16 as the relevant PRP or a calendar month PRP of 1.8.16-31.8.16.  In other words you'd look at either the 10 July or 10 August pay to determine which staff have to be AEd, and in which PRP.

I think you then have to stick with the same basis PRP for contributions and so, if the tax PRP is used then the 4 day's worth of earning's from 1-5 August (based on the 10th July pay), have to be added to the month's earnings paid 10th August to calculate the contributions.  Alternatively, if a calendar month is used, then it's an easy straight deduction from the 10th August pay.

I always find the contributions bit the hardest to consider but go on Guidance 5 para 56 onward and the software developers guidance, page 218 on.

Hopefully however, the pension scheme picked simplifies it all, perhaps to ignore the default split periods for contributions.

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19th Feb 2016 01:40

The PRP conundrum!!
Basically no. The payment date does not dictate the PRP start date. However, the employer pension scheme could have a rule that contributions are always full payment in period to avoid pro-ration complexities.

If the hours paid are based on the prior calendar month (the key reference being calendar month running 1st to last day) and the monies paid on the 10th of the month following, then the employer has 2 choices of PRP. The golden rule is that the payday must fall within the PRP used, so the fact that a payment is in arrears has little relevance as the PRP has to transpose forward (odd I know, but the requirement of the law).

The choice for PRP is calendar month (in the case of this example) or tax month.

So if they want a full period deduction preventing proration regardless of scheme rule change then the postponement is either the end of the calendar month e.g. 31st August so assessment is based on pay on 10th September with a PRP start of 1st September or postponement end 5th August with PRP start of 6th August (tax period) based on pay paid on 10th August.

If they are eligible, then they must be enrolled at that point with the first contribution deduction taking place etc and communication within 6 weeks of the start date of the PRP.

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By NYB
19th Feb 2016 07:59

AE postponement
Do you know I can't really be axxxx with all this ( and this word coming out of a ladies keypad). Providing the right procedure is followed re types of workers, and the rest of it & the software is happy with the dates I just do what I think. I haven't the time to work through complex rules and regs that were written by anoraks for anoraks - certainly not the normal employer. . So far all is well my end and I am doing just fine.. Why it's so complicated who knows. It's like HMRC and their rules and regs on payment dates for FPS.s. And silly EPS.s.

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19th Feb 2016 11:51

Because

NYB wrote:
Do you know I can't really be axxxx with all this ( and this word coming out of a ladies keypad). Providing the right procedure is followed re types of workers, and the rest of it & the software is happy with the dates I just do what I think. I haven't the time to work through complex rules and regs that were written by anoraks for anoraks - certainly not the normal employer. . So far all is well my end and I am doing just fine.. Why it's so complicated who knows. It's like HMRC and their rules and regs on payment dates for FPS.s. And silly EPS.s.

It was written by people who have no idea how the real world works. I could have written better rules in 10 minutes over a cup of tea and a choccy digestive. Seriously the whole thing p***es me off and i only have 2 payrolls to do. I take my hat of to those practitioners who do dozens and dozens.

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19th Feb 2016 11:58

I agree

NYB wrote:
Do you know I can't really be axxxx with all this ( and this word coming out of a ladies keypad). Providing the right procedure is followed re types of workers, and the rest of it & the software is happy with the dates I just do what I think. I haven't the time to work through complex rules and regs that were written by anoraks for anoraks - certainly not the normal employer. . So far all is well my end and I am doing just fine.. Why it's so complicated who knows. It's like HMRC and their rules and regs on payment dates for FPS.s. And silly EPS.s.

I agree totally. Just did my first one yesterday for monthly pay and actually was a lot easier than I anticipated - maybe because the guy from Now Pensions was explaining on the other end of the phone!

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19th Feb 2016 18:58

If you set the parameters right and use appropriate software then all is well. It is complicated, but the requirements of the law. That is why DWP changed the law to accept tax periods.

If you don't it could prove expensive. It's not HMRC, it's DWP and the Pension Regulator.

Doing what you think could be dangerous and foolish!

Just think how ridiculous it was for those of us who had to do this in 2012.

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By NYB
20th Feb 2016 08:57

I hope I AM doing correctly. Brightpay software is fantastic. My AE man does the original set up regarding pay periods so off we go.

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