Posted by & filed under Auto-enrolment, Pension.

businessman waiting  time and looking at a clock

So we said earlier that you can only move your staging date forward and not backwards and this is true. However you can postpone Auto enrolment for individuals (or groups of individuals) for up to 3 months in certain circumstances.

The period of time you can put off automatically enrolling an employee is known as your “Postponement Period”.

Why might you want to do that?

A classic example would be for a new starter. If this person started part way through the month, it would mean that their first month’s income (which would only be a fraction of their normal month’s income) might not qualify them for auto-enrolment.

You would then, by law, have to send them notification that they are not eligible for Auto-enrolment. Confusingly though, the next month when they receive their full month’s income, they will be eligible and you’ll have to send out a further communication stating that they are now eligible.

It’s an admin headache and confusing for the new starter so postponing auto enrolment for them until their first full month is a very reasonable thing to do.
Another example might be when you employ temporary staff that you know will not be with you for longer than 3 months. You can chose to postpone their Auto-enrolment for 3 months and ultimately not need to enroll them at all.

The date to which you postpone the enrolment of an employee is known as the deferral date. On the deferral date you assess the employee to see if he or she is an eligible jobholder. If they are eligible you will have to automatically enrol the person into pension saving.

Postponement can also be used company-wide at your staging date if you require more time to integrate the requirements of automatic enrolment into your existing processes. It is also useful if you wish to align the calculation of auto enrolment to be in line with your “pay day”.

A key point to note with postponement is that each time you postpone an employee’s enrolment you have to issue a notice to each person affected stating your actions. Employees can still overturn this however, as they have the right to save into a pension during the period of postponement and you are duty bound as an employer to pay contributions as if you had not postponed their start date.

To learn more about postponing and to discuss your Auto Enrolment options in detail, contact us today on 020 7562 5858 or email info@credius.com. Or why not visit our website, by clicking here.

Next time: Your Auto Enrolment Action Plan

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