Share this content
0
1191

Postponement with Auto Enrolment

Postponement to an existing employee, with auto enrolment.

I have a client who will be paying a bonus to an employee, who at staging (2016) was not earning enough to be auto enrolled into a work placed pension and continues to be non-eligible.  At the end of this month, this employee will recieve a bonus which will take them into the Auto Enrolment bracket, but as it is a one off, the employer is proposing to postpone enrolment for a month, then the following month the employee will revert to their normal pay.

Originally, when I spoke to the pension company, they informed me that I could not postpone unless this person was a new starter, which I knew was wrong advice, so I confirmed with the Pension Regulator that they could indeed be postponed.  Due to this, I feel wary about what they are now telling me in the following paragraph.

The pension company have told me that I will need to set up a seperate worker group within the scheme, so that this person is highlighted as being different to the rest (because they have been postponed during employment rather than at the beginning of employment).  In this way they say, if there ever was an investigation by HMRC/Pensions Regulator, this employee would be seen to have been postponed, as their higher pay in the year could highlight they should have been enrolled when just looking at the total figures. 

Is this seperate worker group really necessary?  Has anyone else had any experience of this, that could advise? 

Thanks in advance.

Replies

Please login or register to join the discussion.

avatar
By Livepay
05th Jun 2018 16:24

Employees can only be postponed at the start of their employment.

You CANNOT postpone an existing employee unless it is a new pension scheme at the original company staging date.

It also depends on the rules of the pension scheme as to whether bonuses are to be included in the qualifying earnings, I suggest you check with your Pension scheme provider again or an IFA.

Thanks (0)
to Livepay
05th Jun 2018 16:53

I disagree. From TPR's detailed guidance:

5. An employer can only choose to use postponement on
certain dates. If the employer has a staging date, they can use postponement on
a. their staging date, in respect of any workers employed
on their staging date
b. the first day of employment, in respect of any worker starting employment after the employer’s staging date
c. the date a worker employed by them meets the criteria to be an eligible jobholder after the employer’s staging date.

C. being the relevant one.

Thanks (3)
avatar
to Livepay
05th Jun 2018 16:58

I spoke to The Pension Regulator this morning who confirmed you can postpone anytime, not just at the start of employment.

My question is more about whether I have set up another work group within the scheme, which seems tedious to me. I have never heard of this before.

Thanks (0)
to Carolynne
06th Jun 2018 09:26

They are talking through their hats. You need do nothing whatsoever for this employee other than note the postponement and continue to assess.

Thanks (2)
avatar
By aburt01
to Livepay
13th Jun 2018 10:46

I'm also concerned with your statement that Bonuses only qualify if the pension scheme says so. With auto-enrollment that is not the case. Qualifying earnings are specified in the legislation.

Pensions regulator website...

" 12. Qualifying earnings is ...... made up of any of the following components of pay that are due to be paid to the worker:
• salary
• wages
• commission
• bonuses
• overtime
• statutory sick pay
• statutory maternity pay
• ordinary or additional statutory paternity pay
• statutory adoption pay.
The assessment of whether a component of pay constitutes an element of qualifying earnings is for the employer to make. "

Thanks (1)
avatar
05th Jun 2018 17:13

If you are doing the assessment yourself, and not having it done through your pension provider, then there should be no need for them to even know about this employee.

Giving the example of NEST, an employee who has never been enrolled would have no information held by NEST, now would they ever need to know of him unless he was actually enrolled. Postponement is not put through your pension scheme with NEST.

Obviously if your pension provider is running your assessment for you then they will have his info anyway, so may indeed need some kind of arrangement for postponed employees.

Thanks (2)
avatar
to HuntFord
05th Jun 2018 19:53

Thanks, the pension company is not doing the assessment, and as you say, they would never have the information submitted to the pension provider. I am getting a bit annoyed with this particular company, as the people answering the calls just never seem to know what they are talking about and don't put you through to a technician.

Thanks (1)
avatar
By SXGuy
to Carolynne
06th Jun 2018 10:30

Perhaps tell these clowns that as the employee had never met the criteria to be enrolled they have no duty to process anything relating to them.

If they confirm that a bonus is excluded from qualifying earnings then again, they have no duty to process.

In other words it matters not what they want to do, they do nothing.

Thanks (2)
avatar
to SXGuy
06th Jun 2018 10:43

I phoned the company today to tell them I will not be opening a new worker group, as they would never receive any information into this group anyway. As far as I am concerned I am keeping a record of postponements etc should the client ever be audited. They just said again that it was advisable, for future audit purposes. Seems a waste of time to me. I am grateful for all the help I received yesterday on this.

Thanks (0)
Share this content