The move flagged up some small print in the auto-enrolment legislation, which states employers must offer eligible employees the ability to auto-enrol into a qualifying pension scheme on their official staging date, regardless of whether or not they postpone the auto-enrolment process.
The Pensions Regulator (TPR) states in its guidance: “If you postpone from your staging date, it doesn’t change your staging date.”
TPR also states that employers can postpone auto-enrolment for up to three months, can postpone it for as many or as few staff as they like, and the postponement period does not have to be the same length for every employee.
Jamie Jenkins, head of workplace strategy at Standard Life, said: “The deferral period is for auto-enrolment, not for setting up a qualifying pension scheme. There are some statutory communications that still need to take place.”
Employers must write to all staff to tell them they are postponing auto-enrolment within six weeks of the postponement date, according to new changes announced by the Department for Work and Pensions in October which will take effect from 1 November 2013. Employers previously had one month in which to do so.
“Most employers are deferring to some extent for two reasons,” said Jenkins. “One is that they’re not quite ready for auto-enrolment, so they’ve put it back for the initial batch of people they’re bringing in.
“More importantly, the deferral is used for short-term workers, so where [employers] might be bringing in a few extra employees over the summer, using a two to three-month waiting period allows them to avoid bringing those people in.”
Another challenge around staging dates involves pension providers and consultants. They are not privy to PAYE (pay as you earn) reference numbers, so do not have any information about their employer clients’ staging dates.
“We have got the information we hold in our records about the number of people in the pension scheme, but that won’t be the whole population,” said Jenkins.
“Particularly with existing employer clients, we want to say to them: ‘Let’s both be clear on the staging date so we can support you in terms of the information and planning you need to do in advance.’ A big part of that is to make sure they have sufficient time, but not every employer has necessarily worked out when their staging date is.”
BOX: Auto-enrolment changes
- The auto-enrolment joining window is extended from one month to six weeks.
- The deadline for employers to provide information to staff about their opt-in and joining rights is extended to six weeks.
- The deadlines for registration and postponement notices fit with the extended joining window.
