I am aware that The Workplace Pension is now in operation. I have recently taken on a member of staff who has requested not to join a pension scheme and this has been confirmed in writing.
Have I fulfilled the company’s pension responsibilities, asks Mrs B a managing director based in St Leonards
Answer:Although the employee has expressed they do not wish to join a scheme, and confirmed this in writing to you, there are still duties that need to be carried out to ensure The Pension Regulator is satisfied. If the employee falls within the relevant criteria for automatic enrolment they will still need to be formally enrolled into a scheme and opt out of the process as necessary. If this action is not completed, the regulator will deem that you have not completed your duties as an employer.
When an employee starts working, you will need to carry out an assessment to determine if they need to be automatically enrolled into a pension scheme.
If any employees are aged between 22 and the state pension age and earn over £10,000 per year, £833 per month or, £192 per week, you are obliged to put them into a pension scheme and write to them within six weeks from the day they started. The current minimum contribution is 5%, which is set to increase to 8% in 2019, and this must be met by either the company, the employee or a combination of the two. Once enrolled into a pension scheme, an employee can opt out. If this is done within the timeframe set by The Pension Regulator (one month from when active membership is created, or they receive their letter with the enrolment information, whichever is the latest), then contributions will be refunded in full. Any requests to leave the pension scheme after this deadline will mean no refunds are due.
If an employee doesn’t meet the automatic enrolment criteria, they still need to be written to and given the option to join a scheme. If they request to join, an appropriate pension scheme must be set up and contributions made.
Once the correct correspondence has been issued and a scheme set up, if necessary, a Declaration of Compliance needs to be completed and sent to The Pension Regulator which will detail the status of an employee and actions taken. At this stage, your automatic enrolment duties have been met for that individual. However, it is a cyclical process and all stages, from assessment to the Declaration of Compliance, will need to be carried out every three years. If an employee is taken on during this time, they too will need to have assessments carried out and the relevant correspondence issued, etc. when they start working for you. For advice please contact Marc Ransom on 01424 720222