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How does Auto Enrolment Postponement work?

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You can choose to postpone automatic enrolment for up to three months for some or all of your staff. You must write to your staff to tell them you’re postponing automatic enrolment for them. One of the times you can postpone is from your staging date.

Key points

  • You can postpone automatic enrolment for up to three months from certain dates.
  • If you postpone from your staging date, your staging date does not change.
  • If you choose to postpone from your staging date, you must write to tell the staff who will be postponed within six weeks of your staging date.

Why Postpone?

  • Its unlikely that your payroll processing period will match your staging date, most staging dates are the 1st of the month but many payrolls are weekly, it makes sense to start auto enrolment on a pay processing date
  • If you have short term staff or you are a temp agency you will probably postpone in order to avoid unnecessarily assessing staff who will leave within the postponement period
  • You may also postpone to reduce auto enrolment pension payments and admin
  • You can choose any business reason

When can you postpone?

You can only postpone automatic enrolment from:

  • your staging date
  • a staff member’s first day of employment
  • the date a staff member first becomes eligible for automatic enrolment.

If you postpone from your staging date, it doesn’t change your staging date.

Staff whose automatic enrolment you’ve postponed can choose to opt in to your pension scheme during the postponement period.

The Pension Regulator has further details

Don’t mess this up, if you don’t get postponement right…..

  1. You will get a Warning
  2. Followed by a penalty of £400
  3. Followed by fines of £500 to £2,500 per day (depending on the number of employees)

Even the smallest business will get fines of £50 per day!

steve@bicknells.net

You will initially be given a warning, which will be followed by a fixed penalty of £400. Not too severe so far, but then the penalties shoot up for those companies who still fail to comply.

If you employ between 50 and 249 employees the fine for on-going non-compliance is a whopping £2,500 per day. For businesses with fewer employees, between five and 49 the penalty is still £500 per day and even the smallest of businesses will be fined £50 per day.

– See more at: http://www.investmentsense.co.uk/automatic-enrolment-6-reasons-why-auto-enrolment-shouldnt-be-treated-like-your-tax-return/#sthash.KVkekovC.dpuf


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