Automatic enrolment duties will apply even if you employ just one person. As part of their ongoing duties, employers need to continually assess existing and new staff to work out who to put into a workplace pension scheme. It’s important for employers to be aware that this applies to all staff, including short term, seasonal, and temporary staff.
If you are planning to take on seasonal or temporary staff for the Christmas period, you may find it useful to delay assessment and enrolment of these staff – this is known as postponement. Postponement can be used to defer the assessment of a worker for up to three months. The article below considers when this might be helpful and how to apply postponement.
Key points about postponement
- An employer can postpone automatic enrolment for up to three months from certain dates
- If you choose to postpone from the date their legal duties started, they still have duties. This includes writing to tell the staff they’re postponing automatic enrolment for them within six weeks of their staging date or duties start date.
- Use TPR’s sample postponement letter to write to staff
Reasons you may choose postponement?
For seasonal or temporary staff – an employer might decide to postpone the assessment of their workers if they have temporary or short-term staff who will stop working for them within three months. For example, seasonal Christmas staff.
To cover a probationary period - using postponement can also be helpful when applying a probationary period to new starters. It can be helpful to use postponement to delay assessing these individuals until after their probationary period is passed (assuming it is not longer than three months).
To align automatic enrolment with other business processes - for example, if your duties start date falls in the middle of a pay period, it may be helpful to postpone to the beginning of the next pay period.
To allow for bonuses – using postponement can also be helpful when assessing those staff whose earnings would usually fall below the earnings threshold, but where an increase such as a bonus might temporarily take their earnings over the trigger level.
When can you use postponement?
You can postpone automatic enrolment for your staff from:
- your staging date or duties start date
- a staff member’s first day of employment
- the date a staff member first becomes eligible for automatic enrolment
You have the option to postpone for up to three months. You can postpone as many or as few staff as you like and the postponement period doesn’t have to be the same length for everyone. However, it’s important to note that staff can also choose to opt in to their employer’s pension scheme during the postponement period.
How can postponement be used?
You must write to the staff you are postponing within six weeks of the date that postponement is applied to them, to tell them:
- that their assessment and automatic enrolment has been postponed.
- the end of their postponement date.
- that they have the right to opt in or join a pension anytime.
The Pensions Regulator has a letter template on their website which can be tailored as needed – www.tpr.gov.uk/letter-postpone. There’s no need to tell TPR that postponement has been applied.
On the last day of the postponement period, an employer will need to check whether the member of staff whose automatic enrolment they postponed is still eligible to be enrolled. If they are, they must be put into a pension scheme straight away. A further period of postponement cannot be applied, even if they postponed for less than the three months allowed.