< Department for Business Innovation and Skills - Employment law review
30.04.2012 14:41 Age: 1 year
Pensions - auto-enrolment
Some additional points to note:
- Staging date: 1 April 2012 - the size of the employer's PAYE scheme on this date determines the employer's 'staging date' - ie the date by which the new automatic enrolment duties apply. Whilst the number of employees in an employer's PAYE scheme may well change between 1 April 2012 and their staging date, the latter will not be affected. Employers may choose an earlier staging date if they want to, but cannot choose a later staging date than the one specified. The staging date for employers that operate more than one payroll scheme will be determined by the size of their largest payroll scheme on 1 April 2012; multiple employers participating in a single scheme will all have the same staging date, determined by the total number of people in the scheme on 1 April 2012.
- Qualifying figures: the Earnings Trigger for auto-enrolment (ie the amount an employee has to earn to qualify for auto-enrolment) and the Qualifying Earnings Band (the minimum band of earnings on which the employee and employer must pay contributions) are subject to an annual review.
The DWP has confirmed that, for 2012/13, the proposed figures will be:
- Earnings Trigger: £8,105 (in line with the PAYE threshold)
- Lower Limit: £5,564 (in line with the Lower Earnings Limit)
- Upper Limit: £42,475 (in line with the Upper Earnings Limit)
However, the DWP does state that alignment to these rates in 2012/13 'does not set a pattern for the future'.
- Secondments: employees sent on a short-term placement outside the UK may still be classed as being UK-based if their contracts remain with the UK-based employer and if they are expected to return to the UK at the end of their placement. (Conversely, employees coming to the UK for a short term placement are unlikely to be classed as ordinarily working in the UK.)
- Transfers and caps: a committee of MPs has said that the rules that prevent transfers in and out of the scheme run by NEST (the National Employment Savings Trust) as well as the cap which limits contributions to £4,400 per employee per year means that employers with higher earners cannot use NEST as their sole pension scheme, while the ban on transfers is disruptive to employees moving jobs. The rules are due to be reviewed in 2017, but the committee called for a more urgent review.