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Auto Enrolment & Postponement

29th Mar 2016
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The payroll solution that provides all you need for Auto Enrolment.

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An employer can choose to postpone automatic enrolment for up to three months for some or all employees. Staff must be written to telling them that automatic enrolment is being postponed for them. One of the times that postponement can be used is at staging. Typically this will be used for all staff to allow the employer enough time to choose and register with a pension scheme.

If you postponement is used at the staging date, you must write to tell the staff who will be postponed within six weeks of your staging date. This is a key point as many employers mistakenly believe that postponing for the 3 months means they have no duties during that 3 month period.

If, on the other hand, you are all set at your staging date, you still may choose to postpone some employees. One of the main reasons you might decide to postpone is if you have temporary or short-term staff who you know will stop working for you within three months. Another common reason is where an employee has had a one off spike in earnings but where normally they would not be earning enough to be classed as an eligible jobholder.

When postponement might be used

  • at the staging date

  • on a staff member’s first day of employment (first pay day)

  • the date a staff member first becomes eligible for automatic enrolment

In all cases, where postponement is being used, the employee must be communicated with telling them about the postponement.

On the last day of the postponement period, you’ll need to know whether any member of staff whose automatic enrolment you’ve postponed is still eligible to be automatically enrolled. If they are, you must put them into a pension scheme straight away. You cannot apply a further period of postponement even if you postponed for less than the three months allowed.

Your payroll software should allow you to apply a period of postponement for some or all of your employees so that when the postponement period concludes, you will be reminded to enrol or perform any other task required.

The postponement communication contains the following paragraph:

To join the scheme, now or in the future, tell us in writing by sending a letter which has to be signed by you. Or if you send us an email, please include the phrase, ‘I confirm I personally submitted this notice to join a workplace pension scheme.’

This means that they have the right to opt in during the postponement period which will be a nuisance if you have set aside this period to get a pension set up!

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