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Workplace pensions and special circumstances

puzzled-manNot all situations are clear cut when it comes to workplace pensions and it’s important that you do the right thing, otherwise you may end up with a fine.

We look at some of the special circumstances that can occur when it comes to workplace pensions and explain what you need to do in each one.

  • Your employee doesn’t qualify to be enrolled in the scheme

Only employees who are over the age of 22 and earn more than £10,000 a year need to be automatically enrolled into a workplace pension scheme. If an employee earns less than this you might not have to have a scheme in place by your staging date. But this doesn’t mean you can ignore workplace pensions altogether.

You’ll still need to communicate with your employee and complete a declaration of compliance to confirm that your employee wasn’t eligible to be enrolled at your staging date.

Your employee can ask to join a scheme and if this happens you’ll need to go through the process of choosing and setting up a workplace pension scheme.

More on what to do if your employees don’t qualify for auto enrolment

  • You’re no longer an employer

If you did have an employee and were issued with a staging date by The Pensions Regulator (TPR), but no longer employ anyone and don’t run a PAYE scheme, you must let TPR know. If TPR thinks you’re an employer and you miss your staging date you may get a warning, followed by a fine.

This applies even if you know you’ll be employing someone again soon.

We can get in touch with TPR on your behalf, for a small fee.

  • Temporary absence

If you have an employee that’s away on maternity leave or on sick leave and not earning enough to qualify to be automatically enrolled into a workplace pension scheme, you’ll need to follow the usual process of communicating with your employee when you reach your staging date and of completing a declaration of compliance.

  • Company directors

Sole directors are exempt from auto enrolment and should get a letter from TPR to say they have automatic enrolment duties. If a company has several directors they can choose whether they want to be enrolled into a company pension scheme. If you’re in this position you will continue to get letters from TPR and you’ll need to fill in a declaration of compliance after your staging date.

More on what to do if you’re a company director