Automatic Enrolment Obligations and Furloughing During Covid19

by | May 29, 2020 | News

Automatic Enrolment Obligations and Furloughing During Covid19

by | May 29, 2020 | News

The Covid-19 pandemic has disrupted every facet of life in the UK. However, when it comes to workplace pensions, it has been confirmed by the Pensions Regulator, that employers should continue to enrol, re-enrol and contribute towards workers? pensions whether they are furloughed or not.

This warning comes alongside the Government’s landmark Coronavirus Job Retention Scheme, which pays up to 80 per cent of wages for workers on furlough (currently through to the end of October 2020, with further amendments expected) and also covers employers? National Insurance Contributions (NICs) and minimum pension contributions.

Importantly, the cash is paid as a grant each month. This means that employers must continue to run their payroll as normal, including meeting their re-enrolment and re-declaration duties.

What About new employers and staff?

For new employers or new staff, this means you must continue to assess staff and enrol them into a workplace pension scheme if they are eligible. If you are struggling to meet your duties during this time, new employers can choose to delay working out who to put into a pension scheme for up to three months, a practice known as postponement. To qualify for postponement, however, you must write to staff to tell them what you are doing and how automatic enrolment applies to them.

The Regulator has said this about Postponement:

“Remember, if you use postponement on your duties’ start date, it only changes the day on which you need to assess your staff, it doesn’t change your duties’ start date or your declaration of compliance deadline.

In addition, you can only postpone automatic enrolment from your duties’ start date, a staff member’s first day of employment, or the date a staff member first meets the age and earnings criteria to be put into a pension scheme that you also pay into.

What About Existing employers?

Many existing employers are approaching or are currently carrying out their first re-enrolment of staff. Please remember that re-enrolment starts on the third anniversary of your initial staging date.

Please note that you cannot use postponement at re-enrolment. However, if you are struggling to meet your obligations, you can choose a later date of up to three months after your third anniversary to assess your staff.

For expert help and advice meeting your payroll and automatic enrolment duties, please contact our payroll experts.


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