Can I postpone my auto enrolment date?

The Pension Regulator has sent companies a letter with a staging date, which shows when they need to auto enrol eligible employees in a workplace pension scheme. No doubt some businesses will not have completed the auto enrolment process by the staging date deadline, so can they postpone auto enrolment and their starting date?

Why do companies miss their staging date and need to postpone their enrolment?

A business can miss the staging date by simply forgetting about it or procrastinating and not having their workplace pension scheme ready on time, but there are other reasons.

A business that has temporary staff who they know will stop working within three months may find it convenient to postpone auto enrolment. There may be other business processes and administrative reasons that can make it useful to postpone.

How long can a company postpone?

A company can postpone auto enrolment for up to three months after their staging date. A deferred date is the date by which the postponement process must end.

The postponement process

If a company wants to postpone auto enrolment they must first inform their staff in a written postponement notice document, sent within six weeks of commencing the postponement. This is required by law. The letter must tell employees when the deferred date is, their eligibility for auto enrolment and their opt-in rights.

The Pension Regulator website has a template letter to do this, which conforms to all postponement conditions. A link to this document can be found here.

The postponement can cover all or a few staff members.

After the postponement period

Following the postponement period, which can be up to three months, all eligible employees must be auto enrolled into a workplace pension scheme. This cannot be delayed, and the postponement period cannot be extended unless there are exceptional circumstances.

Individual postponement

After a workplace pension scheme has been launched, any new employers can have their auto enrolment postponed for up to three months.

Backdate contributions

As soon as an employee is auto enrolled on a pension scheme, employees and employers contributions are backdated to the staging date, For postponement of individuals, contributions are backdated to when they commenced employment.

What happens if a company misses the deferred date?

The deferred date is when the postponement period ends.

Within five months of their staging date, a business must send a Declaration of Compliance to the Pension Regulator. This tells the Pension Regulator what the company has done to conform to its workplace pensions duties. If employees have not been enrolled by the deferred date, a company cannot declare that it has followed the correct procedures.

There are a number of measures that the Pensions Regulator can take for companies missing their deadlines. This can start with an informal warning and escalate to charging interest on unpaid contributions and fines. If fines are unpaid, then a county court judgement (CCJ) can be issued.

Get help

If your business is having difficulties with setting up a workplace pension scheme, talk to a pensions expert at Endeavour Financial Planning.

Auto Enrolment advice is not regulated by the Financial Conduct Authority.