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Business A which has already staged for AE to new owners business B who are newly registered employers and whose staging date is therefore Aug 2017. My understanding is that the new company B would need to setup a non AE pension enrol all the employees who had triggered auto enrolled or opted-in while employed by original company and where still in the pension at the point of transfer to new owner. These employees would continue to make employee contributions and receive employer contributions in line with the levels operated under AE in company A and that the AE minimums would apply such as the increase due in 2017 up to 2% & 3%. These employees could also leave the new pension.

Employees who were entitled or non-eligible would also retain their rights to opt-in with “relevant employer contributions but business B would not need to run assessment on them and enrol them if they hit the enrolment trigger.

 New staff joining the company would have no pension standing until staging in 2017 unless the employer chose to offer it.

We have run this scenario passed TPR they could not comment said it was a Tupe matter not an AE issue.Tupe referred us to the TPR.

Kronos employment law agreed it was correct as AE status is frozen at point of transfer. It may be wise if you need to handle this type of situation that you ask a Tupe lawyer to confirm in writing what the correct action is.

 

Auto enrolment do I need to set up a PENSION?

By now it’s fairly well known that in general all employers need to comply with Auto Enrolment. There are some exceptions such as limited companies whose only employee is the sole director. (For a detailed list go to http://www.thepensionsregulator.gov.uk/ ) however employers who never pay over the auto enrolment trigger could comply with the regulation but not actually set up a pension. We recently looked at a client with 5 workers.  3 directors all earn £695 a month and 2 part time assistants earning £350 and £450 a month respectively so nobody is going to trigger auto enrolment. The company is required to comply with AE and is proposing to meet its staging duties by writing a comprehensive letter to all workers explaining all the categories of worker and their right to opt-in they will complete an assessment of workers on the 1st payroll which includes the staging date. A certificate of compliance will be sent to TPR. The company will have met its statutory duties but will not have actually set up a pension which it will never need. There is a rider to this solution which must be understood should anyone decide to opt in or a new worker join that is over the trigger the company has 6 weeks to set up a scheme and enrol that worker. We would also suggest that assessment be set up in payroll to ensure that any change is automatically picked up as "out of sight out of mind" could prove very costly.

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DCS Sunderland  T: 0191 514 7009  E: payinfo@dcspayroll.co.uk
DCS Glasgow T: 0141 333 1933 E: carlo@dcspayroll.co.uk
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