Under the Pensions Act 2008 every employer in the UK must automatically enrol their qualifying workers into a workplace pension scheme. But are there circumstances when you can choose whether or not to enrol someone?
Here are some cases where an employer can choose not to enrol an eligible worker into the workplace pension scheme:
- If the employee is a director working under a contract of employment, and where there is a least one other person working for the company and holding an employment contract.
- If the employee is working through their notice period to cease employment in the company. They would become re-eligible for enrolment should notice be withdrawn.
- If the employee has cancelled their membership of a previous pension scheme, then for 12 months following cancellation, it is the employer’s decision as to whether they enrol that person or not. After the 12 months period the employer has a duty to enrol the employee at the next enrolment date.
- If that person is a partner in a limited liability partnership (LLP) company, but is not salaried under HMRC rules.
- If that person has HMRC protected status – in other words they have pension savings above the lifetime allowance and are therefore protected from tax charges. This protection may be lost if they were to be enrolled into the pension scheme, in which case they would have to opt out. It is their responsibility to keep the employer notified of their protected status.
Primopayroll make compliance with auto-enrolment easy, automating the enrolment and communications with employees, reporting to HMRC and organising the payment of contributions for every pay period. Contact us for further information.