The government has expressed a desire to review auto enrolment, which could see part-time and seasonal workers excluded from the process.
The CBI and the National Farmers Union (NFU) have called for the change due to the ‘burden’ caused by auto enrolment. Due to the complexity of the process and as the pension pot is very small, they argue that there is a small likelihood of workers drawing the pension and as a result some feel auto enrolment for these workers is difficult to justify. Employers are entitled to delay enrolling employees for 3 months but there are calls for this to be extended.
There have been concerns that this stance needs to be contrasted with the moral aspects of the law, that is, despite its complexity these workers are entitled to a pension and employers have a responsibility to help their employees save for the future.
Nathan Long, a pensions analyst at Hargreaves Lansdown has stated that this change is premature as there are more important, broader issues that need to be addressed in advance of removing entitlement. He suggests a priority should actually be making sure that those who are not currently eligible for auto enrolment under the current rules are able to take part. These generally includes part-time workers or those at the lower end of the wage scale who do not earn enough to reach the threshold.
It will be interesting to see how this story develops over the coming months, but in the meantime there are several points that employers should bear in mind when it comes to auto enrolment.
- Firstly, you need to know the date you need to begin auto enrolling eligible employees. This is known as the ‘staging date’ and is available from the Pensions Regulator.
- Secondly, you need to work out who is entitled to be automatically added to the scheme, those who can ask to join the scheme and those who are not eligible.
- Finally, you need to find the right scheme for your business. The Pensions Regulator have a series of recommend schemes for you to choose from.
The Pensions Regulator has a useful step by step guide of your employer obligations. Once you have got an appropriate scheme in place Empire will be able to assist you in ensuring that your contract, handbook and policies are up to date and reflect your updated pension situation.