Company Share Option Plan (csop)
are immediately responsible for auto-enrolling employees. AE is business as usual and all employers must comply with the rules. It should be noted that directors of their own companies, who do not have service contracts with their business, are not employees for the purposes of AE even if they appear on the company payroll. They are not exempt but the company can report that it has no duties to perform. Such directors can voluntarily elect to enrol. COPYRIGHT © 2021 THE CHARTERED INSTITUTE OF PAYROLL PROFESSIONALS Upon being auto enrolled by their employers, employees have the option to: • opt-out within a one month window that begins when the auto-enrolment notice is provided to the employee, which must be within six weeks of the auto-enrolment date, and receive a full refund of employee contributions deducted since auto-enrolment (the employer too will receive a full refund) • opt-in voluntarily after having been notified of that within one month of having been assessed by the employer as being: o a non-eligible jobholder: o aged 16 to 74 with qualifying earnings more than the lower earnings threshold and at or below the earnings trigger in a pay reference period, or o age 16 to 21 or state pension age to 74 with qualifying earnings over the earnings trigger in a pay reference period o an entitled worker: o aged 16 to 74, and with qualifying earnings at or below the lower earnings threshold in a pay reference period • cease pension membership from the next pay reference period if they miss the opt-out window – no refund need be offered. Employers can delay assessment for auto-enrolment by up to three months for any, or all, workers. During the period, called postponement, employees can voluntarily opt-in and this overrides the postponement. The employer must re-enrol all eligible jobholders who are not members of a qualifying pension scheme every three years on the anniversary of their staging date (the date they first became liable to begin auto-enrolling). Re-enrolment can take place three months either side of this anniversary if this is preferable to the employer. Postponement cannot be used during re- enrolment. Since April 2016 employers have been permitted to exclude certain jobholders under certain controlled circumstances. Jobholders under notice to terminate, have Lifetime Allowance protection for pension savings and who have opted out or otherwise left a compliant scheme in the previous 12 months can be excluded from re-enrolment if the employer wishes. Following their 2017 review the Government published their intention to reduce the auto- enrolment requirement to those aged 18 and above and to remove the Qualifying Earnings Band (QEB) Lower level, £6,240 for 2021/22 (£6,240 2020/21, £6,136 2019/20, £6,032 2018/19). These changes will not take place until the mid-2020s, subject to parliamentary process. No printing, copying or reproduction permitted. COMPANY SHARE OPTION PLAN (CSOP) A discretionary scheme approved by HMRC, where the company operating the scheme selects individuals it wishes to reward. The terms of a CSOP scheme grant to those selected an option at a fixed future date to purchase shares at today’s price.
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