My client has an employee (formerly also a Director) who has a pension pot which exceeds the Lifetime Allowance. Does my client still have to do auto-enrolement for this employee, even though contributions will attract a hefty tax charge?
Frank.
Replies (5)
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Yes.
The employee's affairs are none of the employer's business.
If the employee doesn't want to pay, he can simply opt out.
But that's up to him.
If the employee meets all of the auto enrolment criteria, then yes. However, it should be possible to enrol the employee (say at the start of the month) and for him/her to opt out before the pay is processed (at the end of the month) meaning no contributions need be deducted or paid. But the opt-out would be in the hands of the employee.
Not if the employer has reasonable belief that the pension is protected.
http://help.thepensionsregulator.gov.uk/faq/general/lifetime-allowance
jcace is correct The employee might decide that AE is pointless (due to his/her age, level of contributions etc)
An opt out before any deductions is quite possible.