Optional auto enrolment?
I was talking to a club the other week who’d got themselves in a sticky situation, pension wise.
An employee had left them back in February and had come back to them to let them know that his pensions was now “set up” and ready for them to make payments.
Got the foggiest? No, we didn’t either.
Turns out that – last year – when the employee had finished his 3-month probation, the club had sent him a letter asking if he wanted to enrol in the NEST pension scheme or contribute to his own personal pension.
He didn’t respond, and instead of automatically enrolling him in NEST (to meet their legal obligation) they did…nothing.
The employee was dismissed in February, paid his final salary, given a P45 and sent on his merry way.
We advised them during the process, and the club “forgot” to mention the pension situation to us at any point.
And now he’s back, wondering where his workplace pension contributions have gone.
Their solution? He’s back on the books, and they’re pretending to still employ him and pay his salary, so they can give him the correct contributions.
Hassle. Faff. Stress. Bother.
All of which could have been avoided with one simple step:
When staff get to three months’ service, they MUST be auto enrolled in your pension scheme.
Don’t ask them. If they want to opt out, they can do that at any point, but if you advise them on that right, you could face a £5,000 fine from the pensions regulator.
Your job is not to advise on leaving or staying in pensions, but simply to fulfil your legal obligation.
And just to be crystal clear: all staff, no matter what contract they are on, are entitled to be enrolled in a government pension scheme, if they meet the criteria.
Including casual/zero hours staff.
Need some help to navigate all this? You know where we are.