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Frequently Asked Questions

Husky answers all your auto enrolment questions

Husky is here to help you. We've compiled our most frequently asked questions below.

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What is a Staging Date?

The date your automatic enrolment duties start is called the staging date and is when the law comes into effect for each company.

You can check your staging date here

Can I bring forward my Staging Date?

You can bring your staging date forward if you wish. You might want to do this if there is more than one associated company within your company’s overall group, with different staging dates, or to align the staging date with your company’s financial year. In order to do this, you must give The Pensions Regulator at least one month’s notice. Husky Finance can do this for you.

What is a worker?

Your auto-enrolment obligations relate to your workers and this means:

“Any individual who works under a contract of employment (an employee), or has a contract to perform work or services personally and is not undertaking the work as part of their own business.”

This is a very broad description and you will need to make sure you don’t miss anyone. If you’re not sure if someone comes within the definition of workers, you can get more detailed information at: "http://www.thepensionsregulator.gov.uk/docs/detailed-guidance-1.pdf

What does ‘Nominate a Contact’ mean?

The employer (e.g. the business owner) is responsible for complying with the changes to workplace pension’s law. The TPR requires the most senior person or business owner as the ‘primary contact’. Alternatively, Husky Finance can be nominated using this email address auto-enrol-tpr@huskyfinance.com and put the client’s email as the secondary contact. You will need the client’s 10 digit letter code and PAYE reference to do this and Husky Finance can look after this for you https://automation.thepensionsregulator.gov.uk/Nomination.

Who do I need to enrol?

The government requires employers to enrol their workers into a workplace pension scheme. This applies to those who aren’t already a pension scheme and who:

  • earn over £10,000 per annum; and
  • are aged 22 or over; and
  • are under their State Pension date.

These members will be assessed as Eligible job holders and will be automatically included in the pension scheme.

What if an Employer doesn’t have any staff?

Automatic enrolment duties don’t apply when a company or individual are not considered an employer. There are no AE duties if the company meets one of the following criteria:

  • A sole director company, with no other staff
  • A company has a number of directors, none of whom has an employment contract
  • A company has a number of directors, only one of whom has an employment contract
  • A company has ceased trading, gone into liquidation or dissolved
  • Automatic enrolment will apply if more than one director has a contract of employment

These members will be assessed as Eligible job holders and will be automatically included in the pension scheme.

I am self-employed. Does automatic enrolment apply to me?

If you are self-employed, you are not required by law to enrol yourself into a workplace pension

Who is treated as the employer for agency staff?

For the purpose of the Employer duties, it is whoever is responsible for paying the worker or whoever actually pays the worker.

How is maternity or paternity pay treated?

If you are receiving maternity or paternity pay, you will be treated in the same way as other workers: if you earn more than, currently, £192 a week or £833 per month, and meet the other joining conditions, you will be automatically enrolled.

I am on a zero hours contract. How will I be treated?

You will be automatically enrolled in the same way as other workers if you earn more than, currently, £192 a week, £833 per month or £10,000 a year and meet the other joining conditions

Who do I not need to enrol?

Workers that do not fall into the Eligible Jobholders criteria will not automatically enrolled. These workers can chose to opt into the scheme and are known as Non Eligible Jobholders or Entitled Members. In April 2015, new legislation was passed that also included Workers leaving Employment, Members who have received a winding-up lump sum and also employees who cancel their membership or have tax protection

What is a Non-Eligible Jobholder?

Members that earn over £5,824 but less that £10,000 will not be automatically enrolled. Members can opt into a scheme and are entitled to an employer contribution from the employer

What are Entitled Members?

Members that earn less than £5,824 and will not be automatically enrolled. Members can join a scheme but they are not entitled to an employer contribution from the employer but they can if they wish

What if a worker leaves employment?

If a worker has given notice or been given notice to end their employment, AE duties are turned into a discretion

How often do I need to assess Workers?

Workers must be assessed every Pay reference period

What is a Pay Reference Period (PRP)?

The period of time over which earnings are to be measured, e.g. if a worker is paid their earnings weekly, their PRP will be one week. If they are paid their earnings monthly, their PRP would be one month.

What is Re-Assessment?

After the first time you assess your employees for their auto-enrolment status at your staging date, you have to monitor their age and earnings for each subsequent Pay Reference Period. They may trigger the requirements to become an eligible jobholder and will therefore need to be automatically enrolled.

What contributions does an Employer and Employee have to pay?

The Employer can use four different ways of calculating their contributions: Using Qualifying Earnings or Pensionable Earnings Set 1, Set 2 or Set 3.

1. Qualifying earnings are defined as salary, wages, commission, bonuses, overtime, statutory sick pay, statutory maternity pay, ordinary or additional statutory paternity pay and statutory adoption pay.

Contributions are based on earnings between the lower qualifying earnings £5,824 p.a. and upper qualifying earning £43,000 p.a.

Pensionable Earnings

Pensionable Earnings can be defined by the employer and may just include basic pay and not overtime or bonuses. If the calculation is based on Pensionable Earnings then contributions should be deducted from the first pound earned unlike Qualifying earnings. In order to ensure that the scheme meets the minimum requirement the regulator has set out three different methods of determining Pensionable Earnings and the relevant minimum contribution levels.

How is Tax relief calculated?

There are two ways that the tax relief on a member of staff's pension contribution is obtained. Many pension schemes only support one tax relief method, so you should understand which system they use.

Relief at source: This is when the employer would apply tax to the member's contribution and the pension scheme would claim 20% tax back from HM Revenue & Customs (HMRC) and add it to their pot.

Net Pay Arrangement: This is when the employer deducts contributions from a member’s gross salary before calculating income tax on the reduced amount. This is then paid to the pension scheme gross of tax

What is New Joiners Postponement?

Employers have the option to impose a wait period of up to three months for any new joiners.

What is Opting Out?

This is when a staff member decides to leave the pension scheme within a month of being enrolled. Employers must not influence/encourage their staff to Opt-Out. Staff who have been automatically enrolled or who have opted in have the right to opt-out. Once staff have been enrolled into the pension scheme, they have one calendar month during which they can opt-out and get a full refund of any contributions. This is known as the ‘opt-out period’. Staff can’t opt out before the opt-out period starts or after it ends.

Who can Opt In?

This relates to Non-Eligible Jobholders. These are staff that earn over £5,824 but less that £10,000. This employee can Opt In to a pension scheme. Staff who Opt In are entitled to an employer contribution from the employer. Opt In requests must be in writing and signed by the person asking to Opt In or if sent electronically, it must include a statement from them that they personally submitted the request.

What does Cease Active Membership mean?

This occurs when a staff member decides to leave the scheme outside of the ‘opt-out period’. Whether they get a refund of contributions will depend on the pension scheme rules.

Who can Join a scheme?

This relates to Entitled Members. These are staff that earn less than £5,824. This employee can join a pension scheme but staff are not automatically entitled to an employer contribution. The Employer can contribute if they wish. Join requests must be in writing and signed by the person asking to join or if sent electronically, it must include a statement from them that they personally submitted the request.

What is Automatic Re-enrolment?

Every three years, the Employer must re-enrol eligible staff into an automatic enrolment pension scheme if they’re not already active members of one

Declaration of Compliance

Once you have enrolled the staff, the company needs to complete a declaration of compliance. This states to the TPR that the company has compiled with all of the AE duties. This must be done within 5 months of the staging date. Husky Finance can complete this as part of the process.

Record Keeping

All automatic enrolment activities has to be kept for six years and opt-out notices for four years

What are the penalties for non-compliance?

The Pensions Regulator is responsible for ensuring compliance with the auto-enrolment legislation; where there is a breach it will initially focus on education rather than imposing fines for non-adherence. In a case of an employer not complying, they will first be told to put things right by The Pensions Regulator. Failure to comply may lead to fines. In the event of persistent and deliberate non-compliance, The Pensions Regulator can issue escalating penalty notices of up to £10,000 a day. It could ultimately end in criminal prosecution and even imprisonment in extreme cases