Pensions auto-enrolment: business as usual

Pandemic or no pandemic, employer obligations remain. With the auto-enrolment (AE) compliance cycle still fairly new, what should you be doing now?

Despite Covid-19, AE duties apply as normal, whether your staff are working, whether you’ve furloughed them, or whether you have staff on placement with government funding as part of the Kickstart scheme. Both you and your staff should continue to make pension contributions. Staff do have the option to reduce the level of contribution in some circumstances: they can also decide to opt out or cease active membership of the scheme, if they decide that is the best course of action for them. But it is critical that as employer, you don’t encourage or induce them to do so: this would breach the legal safeguards provided for workers under the regime.

If you’re using the furlough or Kickstart scheme, you should run your normal payroll process. Both the contributions you pay, and your staff pension contributions due under your pension scheme are calculated on the total pay. That’s regardless of how much government support you are claiming.

If you are a new employer, the pandemic doesn’t make any difference to procedure. You should still assess staff and put them in a pension if they are eligible. But you may be able to formally postpone the procedure for up to three months, and we can advise you more fully here. It’s only a delay, however: it doesn’t cancel your obligations. And it comes with its own admin requirements, so it isn’t completely hands-free.

Regular AE housekeeping

The AE regime has its own cycle of responsibilities. This involves regular re-enrolment and re-declaration duties every three years. In outline, certain staff who have left your pension scheme must be put back in it. And you then have to submit a re-declaration of compliance to the Pensions Regulator (TPR), setting out how you have met your duties.

Many smaller employers will be coming up to their first re-enrolment. TPR is likely to write to you with information about this, recommending that you assess your staff for re-enrolment on the third anniversary of your staging date or duties start date. Although there isn’t the option to use postponement for re-enrolment, TPR is providing some flexibility on dates if you are struggling to get re-enrolment carried out on your third anniversary because of Covid-19.

Here to help

Getting the figures right for pension contributions and the furlough scheme can be extremely complex. If you would like us to review this for you, please don’t hesitate to get in touch.

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