Not 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.
- 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.