Employers should continue to enrol, re-enrol and contribute towards workers’ pensions whether they are furloughed or not, The Pensions Regulator (TPR) has confirmed.
The warning forms part of new guidance designed to help firms affected by Covid-19 meet their automatic enrolment obligations.
It comes alongside the launch of the Government’s landmark Coronavirus Job Retention Scheme, which will pay up to 80 per cent of wages for workers on furlough.
The scheme will also cover employers’ National Insurance Contributions (NICs) and minimum pension contributions.
However, the cash is paid as a grant each month, meaning employers should continue to run their payroll as normal, including meeting their re-enrolment and re-declaration duties.
New employers and staff
For new employers or new staff, this means assessing staff and enrolling 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. This is known as postponement. To qualify for postponement, you must write to staff to tell them what you are doing and how automatic enrolment applies to them.
Commenting on postponement, the regulator states: “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.”
Likewise, 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. Find out more about postponement here.
Many existing employers, meanwhile, are approaching or are currently carrying out their first re-enrolment of staff. This starts on the third anniversary of your staging date.
Please note, you cannot use postponement at re-enrolment. However, if you are struggling to meet your obligations, you can choose a later date up to three months after your third anniversary to assess your staff. Use the re-enrolment date tool to see available dates. Find more information about re-enrolment here.
For help and advice meeting your payroll and automatic enrolment duties, please contact Richard Leonard at Richard.Leonard@knfp.co.uk or by calling 0113 204 4215.