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Sundry AE questions

Sundry AE questions

I have the following sundry auto enrolment queries and have not managed to find the answers.

These are for different clients which all have eligible non-Director workers so a scheme is required:

- If a Director is not on the payroll then I assume that he/she is not a worker so does not need to be added to the scheme?

- If a Director is on the payroll then if they earn <£10k I assume they are not a worker?

- If a Director is on the payroll but wants to opt out then if they earn >£10k do they have to wait til the first month to opt out and get this repaid or are they not a worker if no contract, regardless of how much they earn?

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04th Mar 2016 11:35

Assess workers

Generally speaking, a person is a worker if they have a contract of employment. If the directors don't have contracts (or if the director is the sole employee) then they aren't workers.

You only assess workers so the question of whether they're eligible or not doesn't even apply to non workers. Assuming the director has no contract, nothing AE related will happen with them at all.

The director being on the payroll isn't relevant. If the director is a worker and isn't on the payroll, they still need to be assessed and receive the relevant letters.

A worker can't opt out until they've been enrolled. They'll pay pension in month 1 and get a refund in month 2.

A worker earning less than the 10k is still a worker but they'll be either an entitled worker or a non eligible jobholder. They won't join the scheme automatically.

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By Matrix
04th Mar 2016 11:40

Thanks this helps as some Directors already have pension schemes and don't want to join the new schemes.

Conversely if a Director wants to join a pension scheme but is not a worker then I assume they are just sent an opt in letter like all non-eligible jobholders?

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04th Mar 2016 12:21

They don't have the right to opt in or join as they aren't a worker - the employer is not obligated to provide a pension scheme if they ask. No letters need to be sent. They can certainly join the scheme but it's the employer's decision and would be like they joined a scheme before AE. It wouldn't be through any of the AE processes - automatic enrolment, opt in or join.

In practice, that probably won't matter since they're the director anyway and can give themselves a pension if they choose to. The pension provider may want them to be treated differently.

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By Matrix
04th Mar 2016 12:31

OK thanks.

The Director in each case is the 100% shareholder.  So I would need to check with the AE provider how to treat a Director who is not a worker if they wish to opt in?

The Directors wouldn't want to put contracts in place etc due to minimum wage.

 

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04th Mar 2016 14:41

Better options

Since your Director isn't a worker I believe AE schemes wouldn't take him. I'd be wary of treating him like an entitled worker (such as asking to join an AE scheme) as someone might then question his minimum wage status.

Add to that the fact that you will almost certainly be able to find a more appropriate scheme for a Director to join.

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By Matrix
04th Mar 2016 16:16

Thanks - does that mean that no one is registering Directors in AE schemes then?

I thought that if the company is bearing all the cost of running the scheme then, subject to the Director taking their own financial advice, they may choose to join an existing scheme rather than looking elsewhere.

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