Pandemic or no pandemic, employers still have to fulfil their Pensions auto-enrolment obligations. Here’s a reminder of what you should be doing now.
Whether your employees are working, have been furloughed, or are on placement with government funding as part of the Kickstart scheme, your duties in relation to pensions auto-enrolment still apply as normal. This means that:
- Both you and your staff should continue to make pension contributions.
- Employees have the option to reduce the level of contribution in some circumstances.
- Staff can choose to opt out or cease active membership of the scheme if they decide that is best for them. However, employers should not encourage or induce them to opt out; this would breach the legal safeguards provided for workers under the Workplace Pensions 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 are calculated on the total pay – irrespective of how much government support you are claiming.
If you are a new employer, the pandemic doesn’t make any difference to the procedure. You should still assess staff and put them in a pension scheme if they are eligible. However, you may be able to formally postpone the procedure for up to three months. Note that this would only be a delay and does not remove your obligations. Postponement comes with its own admin requirements, so is not a completely hands-free option.
Staying on top of Pensions auto-enrolment
The auto-enrolment regime has its own cycle of responsibilities requiring you to carry out regular re-enrolment and re-declaration duties every three years:
- Certain staff who have left your pension scheme must be put back in it.
- You will 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 what you need to do and to recommend 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 postpone re-enrolment, TPR is allowing some flexibility on dates where companies are struggling to complete re-enrolment on their third anniversary because of COVID-19.
How we can help
Getting the figures right for pension contributions and the furlough scheme can be extremely complex. Please get in touch if you would like us to review this for you.