Auto enrolement will soon be here and we have a few with staging dates coming up in the new year-
if a company has one director office- with no contract of employment, i appreciate that we can get exemption from auto-enrolement from the pensions regulator-
does any one know if the same applies to two directors and no employees- or does a scheme need to be set up and then they opt out?
Also, can any one recommend a good company that can help accountants with this as most clients ae going to turn to us for advice/help,
what is everyone doing about this?
Replies (9)
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Get it right
It is auto-enrolment and it has been here for quite a long time now.
Here is where you notify TPR that the AE legislation does not apply - as you can see, it covers any number of directors (provided that not more than one has a contract of employment), but it should mention that it is also a requirement to have no other staff.
The administration of workplace pensions is mainly a payroll function.
Do a search for the many other threads on this topic which come up every week.
Spouse as director?
Here it is from the horse's mouth.
http://www.thepensionsregulator.gov.uk/employers/What-if-I-dont-have-any...
We have some clients - husband is the director, wife is company secretary (or vice versa) and both are paid a salary at the NIC threshold. As one of them is not a director, there is no exemption from Auto Enrolment. The options would appear to be (i) appoint the spouse as director and claim exemption or (ii) register with NEST but provided the salary is under £833 they don't opt in. Does anyone know what the level of ongoing admin would be for registering with NEST and then not using it, i.e. the spouse never opts in. Unless it is a case of register the scheme and then forget about it, the least painful option would appear to be to make all salaried spouses directors.
Company secretary exemption
I have a client [xxx Ltd] who eMailed the Pension Regulator stating that only himself as director and his wife as Co Secretary received salaries and querying in these circumstances did AE apply to his company.
PR replied in an eMail agreeing that xxx Ltd is "not an empoyer" and therefore taken off PR mailing list, but if circumstances changed must comply with AE obligations.
Now I wonder is PR wrong or is it that there is a exemption for COMPANY OFFICERS (ie. incl secretary) as opposed to company directors only being outside scope of AE?
S339.150722
Office holders
The exclusion for directors, from being defined as a "worker" to whom the AE pensions legislation applies, is set out in s.90 Pensions Act 2008. It seems to me to be explicit that it applies only to directors and I do not see how it can be interpreted to extend to other office holders, such as a company secretary.
The 'Notify TPR' website page makes no mention of company secretaries, so if you were using that to notify your exemption from AE, you would have to tell a lie if you were claiming to extend the exemption to a company secretary, who is not also a director.
If you want to claim exemption as an employer, the only safe route is to make the company secretary a director. If you don't want to do that, pay the secretary less than the NI LEL of £5,824 in 2015/16, in which case the secretary is entitled to ask you to operate a pension scheme, but not an AE compliant one, or pay between £5,824 and £9,999 and hope that the secretary tells you in advance that they do not wish to opt in to your AE pension scheme - in both cases, you would not have to set up an AE pension scheme, but you would still have to notify TPR that you had complied with AE within 5 months of your staging date
TPR
We were advised by TPR as follows if we wanted to claim exemption for a company secretary...
Our answer to your question is that where an employer is satisfied it has no workers, due to being managed by one director and a company secretary, who is acting in that capacity alone ie an office holder then the option to select is
There is only one director and there are no other staff working for the company.
TPR specific Q & A re: Company Secretary (Company Officer)
As my client specifically ASKED the Pension Regulator if AE applied to them giving full facts and PR replied to those specific facts then any alleged error is that of the PR in no way can my client be held responsible for following specific advice of the regulator..
No website deception, no wrong box ticking, no information witheld by my client - just a plain question by eMail receiving a plain answer, all now recorded in .pdf form for the record and future reference.
Thank you Kazmc for finding the same specific advice received from the PR and letting us know that my client is not alone in being told no AE obligations for company secretary per the PR.
TPR Detailed Guidance
It doesn't need an exchange of private e-mails with TPR or a telephone call, because TPR spells it out in its booklet Detailed Guidance for Employers - 1, Page 11:
36. Examples of office-holders who are not normally workers include:
• non-executive directors
• company secretaries
• board members of statutory bodies
• trustees.
I personally feel that this is an incorrect interpretation of s.90 Pensions Act 2008 and is therefore an extra statutory concession by TPR, but that is no reason not to take advantage of it. However, my point is that this guidance is not repeated on the online introduction page for claiming exemption, which refers only to directors, with no other "staff", and is therefore somehwat misleading. If you are using this online notification to claim exemption for an employer with only a director and a company secretary on the payroll, make sure to keep a copy of the published guidance.
Be very careful
The TPR does provide extensive advice on this subject, and will on most occasions grant an exemption if it is applied for, however, any exemption will come with the caveat that it is granted on the details provided. The key to establishing whether a director is classed as a worker will depend on their employment contract. Remember employment contracts can either be verbal written or implied. If there is more than one director and they work in the business they will need a scheme setting up. If they have managed to get an exemption and it is considered at a later date that they have not provided correct information the fine could be hefty and include retrospective contributions.
Here at Enrolex we provide an assessment and scheme set up service for Accountants clients.
Email [email protected] for more details.