Postponement is when you decide to delay enrolling employees into a workplace pension scheme.
This could be because you know a member of staff is leaving, or you’ve taken on new or temporary staff, or for administrative reasons.
You can choose to postpone auto-enrolment for up to three months (and not a day over!)
You can postpone from:
- Your duty date (the date by which you need to have a workplace pension in place)
- An employee’s first day of employment
- The date an employee first becomes eligible for automatic enrolment
Your duty date is the date when your first job-holder (staff member) commences work. Before 1st October 2018, existing employers were given a fixed “staging” date, which is now also known as a “duty” date.
It’s important to understand that if you decide to postpone all staff from your duty date, your duty date stays the same.
You must also carry out your duties to assess your workforce, even if you plan to postpone auto-enrolment.
Why postpone?
There are several reasons why you might want to postpone automatic enrolment for newly eligible jobholders.
Common reasons are:
- The jobholder has resigned and is in their notice period
- You take on a new member of staff who is on a probationary period
- You take on temporary or seasonal staff who won’t be with you for more than three months
- You want to align enrolment with the start of next full pay reference period for payroll or other business processes
- Some workers occasionally experience a temporary spike in their earnings which would make them eligible to be enrolled
- As a new employer, you may want to give yourself a little extra time to choose an appropriate Workplace Pension Scheme and/or to delay the extra costs associated with providing a pension and contributions.
How postponement works
- You can postpone as many or as few staff as you like and the postponement period doesn’t have to be the same length for everyone.
- You can use postponement on your duty date to delay automatic enrolment for some or all staff for up to 3 months.
- If you’ve already staged and enrolled some staff you can postpone auto enrolment for new workers or workers who subsequently become eligible.
- You can postpone a worker more than once, providing postponement is not consecutive.
There’s no need to tell The Pensions Regulator (TPR) if you decide to postpone. But you must write to the employees to tell them that their auto-enrolment is being deferred to a later date – known as the deferral date.
If you’re postponing you have to write to your staff within six weeks of:
- Your duty date, if you’re using postponement from your duty date
- On the first day of employment, if you are postponing an individual employee or group of employees
- The date an employee meets the criteria of an eligible worker
Your letter must tell them:
- That automatic enrolment has been postponed
- The deferral date for re-assessment
- That on the deferral date, if they meet the criteria, they will be automatically enrolled
If they are non-eligible jobholders that they have the right to opt in and if they’re entitled workers they can join the pension scheme but you don’t have to make contributions.
If you take on a group of seasonal staff and want to postpone auto-enrolment, you will need to write to the employees individually.
Once you reach the deferral date you need to assess the employees again. If they are eligible they must be enrolled into the pension scheme and cannot be postponed again.
If they don’t meet the eligibility criteria on the deferral date then you will need to assess the employee on the first day of each pay reference period going forward; as age and earnings are the trigger points it makes sense for assessments to occur during the payroll process. If an employee meets the eligibility criteria in the future, you can postpone again, as long as there is a gap of at least one pay period between your deferral date and the date you decide to postpone.
More information
- Trigger points
- Detailed guidance on postponement from The Pensions Regulator
If all of this seems like a hassle – and it is – don’t forget that you can outsource your ongoing pension duties, along with pension scheme set-up, to Biznus Payroll.
