New employers setting up PAYE schemes since 1 October 2017 have also had pension auto enrolment duties beginning the moment they take on their first employee.

The Pensions Regulator has published useful guidance on what to do if an employer misses this start date.

A workplace pension needs to be established as soon as an employer recruits their first member of staff.

Where this pension start date is missed by up to 6 weeks, the employer can apply for a postponement to delay the assessment of their workforce (for a period of up to three months from their duties start date).

Less than six weeks overdue

Once the employer has chosen a pension provider, the staff member will need to be enrolled in the pension scheme and start paying into it. Contributions will have to be backdated to the day the staff member first met the age and earnings criteria to be put into a scheme.

Postponement can be used to delay working out who needs to be enrolled into a scheme, which can mean backdated contributions will not be required. An employer can postpone assessing its staff for up to three months, thus providing a valuable breathing space to catch up with its legal duties.

More than six weeks overdue

Where the pension duties start date is overdue by more than six weeks, postponement cannot be used. The employer will need to pay any contribution arrears.

Backdating contributions

For backdating contributions, an employer will need to take the following steps:

  • Inform the scheme provider that backdated contributions are required.
  • Compute the period of arrears.
  • Re-run the payroll process for the period of arrears, to calculate the amount. The Pensions Regulator also has an online contributions calculator for this purpose.
  • Inform the pension provider of the amount; some may allow catch up via instalments.
  • Give staff the option to pay their own unpaid contributions (or possibly offer to pay this amount on their behalf).
  • Commence making regular contributions each time the payroll is run.

If you are a new employer and you have not yet established a workplace pension, contact a member of our Payroll Services team, who will be happy to discuss what you need to do.

 
 
 

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