DEFINITION OF SMALL EMPLOYER CHANGED FOR AUTOMATIC ENROLMENT
17 July 2012
A further change has been made to the implementation timetable for small employers. These employers will now, be required to establish the number of workers in their PAYE scheme as at 1 April 2012 rather than the number of full time equivalent workers they employ at that time.
The Department for Work and Pensions (DWP) announced the change in their response to the consultation on ‘Revised implementation proposals for workplace pension reform’ .
Background The government announced in November 2011 that employers with fewer than 50 workers will not be brought into automatic enrolment until the next Parliament. This replaced earlier proposals in respect of the moratorium on micro business which were subsequently withdrawn. As a consequence, the DWP have re-designed the implementation timetable to ensure that no small employer with fewer than 50 workers in its PAYE scheme will be brought in before May 2015, and amended the staging timetable in the Employers’ Duties (Implementation) Regulations accordingly. These changes mean that there is no effect on any employer’s existing staging date before March 2014. The staging dates in the period April 2014 to April 2015 have been re-profiled to accommodate employers with 50 to 249 persons in their PAYE scheme. Further changes As a consequence of the timetable re-design and responses to the consultation, the DWP has therefore, made a minor change to the description of small employers and removed the full time equivalent provision. These employers will now, instead, be required to establish the number of workers in their PAYE scheme as at 1 April 2012 rather than the number of full time equivalent workers they employ at that time. This will continue to allow genuine small employers who share a PAYE scheme with a larger employer, and who cannot be separately identified in PAYE data, to move their staging date to another designated staging date in the next Parliament. It will also allow any employer whose PAYE scheme contains 50 or more persons, rather than workers, to similarly move their staging date.
This will particularly benefit those small employers who pay a company pension to past employees through the payroll.
The DWP has also extended the first transitional period for defined contribution schemes to ensure that all existing employers are staged in before the minimum one per cent employer contribution increases to two per cent. To provide parity for employers using defined benefit or hybrid schemes, the transitional period for defined benefit or hybrid schemes has also been extended and aligned.
For full details read the 12 page response to the consultation.
DON’T LEAVE IT TOO LATE TO PREPARE FOR AUTOMATIC ENROLMENT
24 July 2012
Employers have been urged to step up their preparations for automatic enrolment as evidence emerges that businesses are underestimating the time it will take to get ready.
CIPP Policy News Journal
12/04/2013, Page 242 of 362
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