What is Auto Enrolment postponement?
Sometimes referred to as 'waiting period', postponement of automatic enrolment is the deferment of auto enrolment duties. Employers can postpone auto enrolment for a period of up to three months from specific dates, however they can only do so at specific times and must also give notice to employees.
Example: If an employer has a staging date/duties start date of 30th April and wishes to postpone this date, they have 3 months from the 30th April. This would mean that the latest the employer would be able to postpone to is 30th July.
Why postpone Auto Enrolment?
Employers may wish to postpone their auto enrolment duties to give them some flexibility when it comes to aligning their new duties with existing business and payroll processes. For example, postponement can be used to help with the administration of a large number of new joiners to a pension scheme by staggering the employer's auto enrolment duties over a three month period.
How to postpone Auto Enrolment and when?
The employer must notify their employees of postponement. The deadline for issuing the postponement notice is six weeks and a day from which they wish to use postponement. If the notice is not issued, postponement cannot be applied.
An employer can only postpone automatic enrolment from:
- their staging date/duties start date
- a staff member's first day of employment
- the date a staff member first becomes eligible for automatic enrolment
If an employer postpones from their staging date/duties start date, it doesn't change their staging date/duties start date and they still have duties including the obligation to write to the staff who will be postponed, and inform them of the deferment within six weeks of their staging date/duties start date.
Does postponing Auto Enrolment change my deadline for the Declaration of Compliance?
Irrespective of whether an employer has postponed auto enrolment or not, all employers are required to submit their declaration of compliance to the Pensions Regulator within five months of their staging date/duties start date.
Can an employee opt-in during a postponement period?
An employee has the right to opt-in during the postponement period. An employer is required to check the level of qualifying earnings of the worker to determine whether the worker is a jobholder or entitled worker and make contributions to the employee's pension.