Auto Enrolment - How to assess?

Complications with assessment

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A little more tricky than the title suggests.

I had my first client stage 1st May, and did everything that was required. A new worker started 2nd May and I have only just received his hours.  The question is, is he above the threshold or below it?  

The current employee is paid monthly, with set hours per week (below the threshold) and I do the hours on either a four week or five week month.  The new employee has worked 2 weeks over the £192 per week and two weeks under. At first I added his hours up to 110 which put him two hours under the threshold on a monthly basis BUT according to the TPR website I think I should be calculating weekly rather than monthly? 

43. The usual pay reference period for a worker therefore is the period of time by reference to which the employer pays the worker their regular wage or salary. The pay reference period is not the interval between the dates the worker actually receives their pay, ie it is not the pay frequency, although sometimes the two will coincide. For example, a salaried worker who is paid by reference to the work done in a calendar month will have a monthly pay reference period and will also have a monthly pay frequency

http://www.thepensionsregulator.gov.uk/docs/pensions-reform-assessing-th...

 

If this is correct how do I do the assessment on Moneysoft?  It will not know it's a weekly calculation, albeit paid monthly.

Replies (5)

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Euan's picture
By Euan MacLennan
26th May 2017 14:11

I am confused. If "the current employee is paid monthly, with set hours per week", how can he have "worked 2 weeks over the £192 per week and two weeks under"? Are the "set hours" paid at different rates in different weeks? If the pay for the set hours is "below the threshold", how has he "worked 2 weeks over the £192 per week"?

However, I think you are over-complicating it. His pay reference period is a month. You choose to pay 4 weeks in some months and 5 weeks in others. The employees are more likely to be above the earnings trigger in 5-week months. Once they have been auto-enrolled, they carry on paying pension contributions even if their pay falls below the trigger (in 4-week months), unless they opt out.

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By legerman
27th May 2017 22:22

Hi Euan

The current employee is on set hours, not the new employee. It is the new employee that worked enough hours weeks 1 and 2 to be auto enrolled on a weekly basis.

I did originally plan to treat this employee as a monthly pay period because, as you say, he's paid monthly, but according to the TPR website, "The usual pay reference period for a worker therefore is the period of time by reference to which the employer pays the worker their regular wage or salary. The pay reference period is not the interval between the dates the worker actually receives their pay, ie it is not the pay frequency, although sometimes the two will coincide" As the employer calculates his hours on a weekly basis, I read into that his pay reference period may well be weekly.

I take your point that I may be overcomplicating things though.

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By HuntFord
30th May 2017 09:27

He's definitely monthly paid. What's confusing you is the bit about reporting. Except he doesn't report to you 1 week at a time, he reports a group of weeks. As you then pay him these hours monthly, he is assessed monthly. His pay does not refer to 1 week, it refers to all the weeks in a given month.

I hope that's a bit clearer

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By bendybod
31st May 2017 11:18

I've had a similar situation where the client's employees are marginally under the threshold if you take their annual salary. However, in certain months they will work overtime (some of it being contractual) or will not work all of their hours.
It is actually helpful to read the above that seems to state that if they go over in one month, they are automatically enrolled regardless of what happens in subsequent months. I had failed to find that on TPR website.

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By Christina H
31st May 2017 16:01

I would get the client to agree a postponement period for new starters.

I don't know how it works with Moneysoft but if an employee has a pay spike that would take them over the threshold for a particular pay period you can postpone them for up to 3 months. You would have to work closely with the employer as you cannot postpone for two periods consecutively, however it can be done multiple times otherwise (as long as the employee won't go over the £10k annual threshold of course) http://www.thepensionsregulator.gov.uk/docs/detailed-guidance-3a.pdf see page 19

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