In the interim period, HMRC has agree to provide guidance in the Budget briefing on the steps individuals must take to protect their financial position in respect of their transitional protection rights for their pension savings under HMRC legislation. The Pensions Regulator will mirror this guidance their website. HMRC will also ensure their guidance is appropriately amended so that individuals are aware of the further exception under the new protections Winding Up Lump Sums (WULSs) Legislation introduced in April 2015 allows the employer to choose whether or not to enrol workers to whom they have paid a WULS subject to an undertaking given by the employer to HMRC, who are then re-employed by the same employer within 12 months of the payment of the WULS. Regulations contain an amendment to clarify the policy intention, so the exception only applies where an individual receives a WULS and is re-employed by the same employer within the 12 month period, and attains eligibility for automatic enrolment. If the worker who received the WULS only becomes eligible for enrolment after the 12 month period has elapsed, they should be auto-enrolled in the usual way. Re-declaration of compliance There are currently two deadlines prescribed in law for the re-declaration of compliance; one for employers who have no one to re-enrol, and a different one for those employers who do. There will now only be one date for the re-declaration. Early Automatic Enrolment – bringing your staging date forward There are prescriptive conditions which employers must satisfy if they want to bring their staging dates forward and for those employers with no-one to enrol, there is currently no way to bring their staging date forward unless they set up a shell pension scheme. the requirements for employers, who wish to bring forward their staging date, are simplified so that where the employer has no eligible jobholders to automatically enrol, they no longer need to seek the agreement of a pension scheme to bring forward their staging date; the measures remove the requirement for employers to give the Pensions Regulator one month’s notice of their intention to bring forward their staging date so that notice can be given at any point up to and including their new early automatic enrolment date; employers, without anyone to enrol, can now bring forward their staging date to any date, between today and their original staging date, and are no longer restricted to a 1st of the month date; the measures align the timeframes for re-declaration, regardless of whether an employer has eligible jobholders. Employers without anyone to re-enrol are now treated in the same way as employers with eligible jobholders, so that they need only provide information to the Regulator within 5 months of the third anniversary of their original staging date; and then, broadly, at 3 year intervals from their last re- enrolment date. Transitional easement for certain formerly contracted-out salary-related schemes Employers using defined benefits schemes for their automatic enrolment duties were able to demonstrate scheme quality by the existence of a valid contracting-out certificate. From 6 April 2016, employers offering defined benefits schemes will no longer be able to contract their employees out. To ensure that their schemes qualify for automatic enrolment, employers would have to use the Test Scheme Standard or the alternative quality requirements for defined benefits schemes. The changes mean that employers who have not changed the benefits of their formerly contracted out defined benefits schemes will be able to use a scheme level cost of accruals test. This easement will be available until the earlier of two dates: either the date that the actuary signs the first report after 5 April 2016 that breaks the cost of accruals down to benefit scale level or 5 April 2019. The easement will obviate the need for employers to commission or undertake nugatory work to demonstrate that their scheme qualifies to be used for automatic enrolment. The new regulations make the following changes:
Further details:
Government response to the consultation on regulations to simplify automatic enrolment processes and reduce burdens on employers The Occupational and Personal Pension Schemes (Automatic Enrolment) (Miscellaneous Amendments) Regulations 2016 CIPP response to Technical Changes to Automatic Enrolment - January 2016
CIPP Policy News Journal
25/04/2016, Page 347 of 453
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