Frequenty asked questions

Advertising

Besides payroll, what other areas do your subscribers have responsibility for?

The breakdown below is based on the results from the 2011 membership survey which ran from 1 August 2011 for six weeks. Members selected all of their areas of responsibility: 95% - payroll 49% - pensions administration 49% - implementation of new systems 45% - HR 40% - compensation and benefits 36% - absence management 35% - finance 32% - flexible benefits 24% - pensions payroll 24% - training 22% - accountancy 16% - recruitment

Do readers of Professional in Payroll, Pensions and Reward magazine subscribe to the other payroll magazines?

Our research shows that approximately 85% of our readers ONLY read Professional in Payroll, Pensions and Reward magazine and do not subscribe to any other publication.

Do you offer agency discount?

An agency is classed an advertising agency that has been commissioned to place ads on behalf of another organisation. Agency discount is 10% off the rate card.

Do you offer online advertising?

Yes, online advertising is available on all pages of the CIPP website. If you are looking to advertise a job, we have a payroll jobs board. We also offer email advertising, whereby we can send a targeted message. This is quite popular and has been successful for organisations that have opted to make use of this channel. All print adverts that appear in Professional in Payroll, Pensions and Reward magazine will also appear online in the e-version of the magazine. This is available to all members, subscribers and an additional database of trial members who have access to the online magazine only. For more details email info@cipp.org.uk

How many payroll professionals are there overall?

Previous research shows that there are approximately 500,000 individuals that process payroll in the UK.

How many times is Professional in Payroll, Pensions and Reward magazine distributed in a year?

Currently there are ten issues a year, one per month with the July / August and December / January issues combined.

Is your circulation ABC audited?

Not at the moment, but we are looking to have it ABC audited in the future.

The circulation of Professional in Payroll, Pensions and Reward magazine is lower than that of the other publications, why should I advertise with you?

All of our subscribers' request, and pay for, Professional in Payroll, Pensions and Reward magazine and 97% read every issue. 87% also keep every issue to refer back to should they need to. Another advantage is that all of our subscribers are either CIPP subscribers', or students of the CIPP. And 59% are in a management / decision making role.

What is the current circulation of Professional in Payroll, Pensions and Reward?

Approximately 6,500 - this is made up of CIPP subscribers', students (1,200) and paid for subscriptions.

What is the geographical distribution of your subscribers?

Our subscribers' are based all over the UK, with a small % overseas. Most are located in the South.

What other sponsorship opportunities are available?

We offer a range of sponsorship and exhibition opportunities, those currently available can be viewed on the website

What type of organisations do your readers work for?

Over 50% of our subscribers work for large organisations with over 1,000 employees on the payroll. The majority of our subscribers are from the private sector, but we have a mix of all industry types

Apprenticeships

How long is the apprenticeship scheme?

This will depend on the learner but typically level two will take 12 -15 months to complete. The level 3 will take approximately 15-18 months to complete.

How much will it cost me, the employer?

Recruitment and set-up of an apprenticeship scheme for the age range 16-18 years will be free of charge (FOC). If the person being recruited is in the 19-24 age range, this will be subsidised by government funding and the cost will be in the region of £1,500 per engaged apprentice. This is a one off fee and there will be no additional administration charges imposed. It is important to remember that the apprenticeship NMW (hourly fee £2.65) applies to all recruits.

Can I pay the apprentice National Minimum Wage (NMW) wage?

For the 1st year of employment you need to pay a minimum of £3.30 per hour. Please visit the following link for further information on apprentices and the NMW: https://www.gov.uk/national-minimum-wage-rates. Remember that the NMW increases year on year.

What if the apprentice does not wish to remain on the scheme for 15-18 months?

The simple answer is this would not be a suitable candidate. The person engaged in the scheme would be expected to complete the level they are engaged onto.

Should I wish to engage in the apprenticeship scheme when does this commence?

We are running a pilot between February and April and should be in a position to commence the scheme from May 2013.

What happens when the student has successfully achieved their apprenticeship?

At the end of the scheme the student will become an employee of the organisation. Depending on their individual and your business needs, they may then choose to progress to the CIPP's Foundation Degree in Payroll Management and would be eligible to undertake the Institute's APEL (Accredited Prior Experiential Learning) interview free of charge and, if successful, will gain direct entry to year two of the Foundation Degree qualification.

Will you find me a candidate or do we recruit directly?

Either, we can assist you whichever you prefer to do. If you, as the employer, recruit directly the CIPP will only step in to assist when you have recruited and signed an apprentice/s onto the scheme. However; should you require assistance we could assist you to recruit individuals onto the scheme and can discuss this in more detail on an employer by employer basis during your initial meeting.

How much time off would be required for the individuals engaged?

Educational interaction would involve monthly face to face interaction with tutorials (teaching days), along with online learning support and tracking. We would discuss a learning plan with you in advance.

Do I need to employ the apprentice?

Yes. You will need to employ the apprentice from the start of the apprenticeship.

What does the student gain at the end of the apprenticeship scheme?

A level two or level three apprenticeship, or full apprenticeship if the individual has achieved both levels. Successful individuals will be provided with a certificate to prove knowledge and competency gained.

Who is the apprenticeship programme aimed at?

The apprenticeship scheme is designed to attract learners who are new to the payroll profession; therefore does not necessarily assume prior knowledge. It teaches individuals the day to day payroll operations and processes, such as calculation of gross pay.

Apprenticeship levy

Is there a limit to how much apprenticeship levy I can claim?

There is a funding cap per individual apprentice but not the employer and it is important to note that the levy must be spent on apprenticeship delivery and not on the business costs associated with hiring an apprentice for example:

  • Overheads;
  • Supervision costs; and
  • Salaries for the apprentice of your staff.

There are currently six caps for existing trailblazer standards, which are demonstrated in the table below:

Funding Band Core Government contribution cap (£)
1 1,500
2 2,000
3 2,500
4 3,000
5 3,500
6 4,000
7 5,000
8 6,000
9 9,000
10 12,000
11 15,000
12 18,000
13 21,000
14 24,000
15 27,000

Additionally there are three incentive payments available, which are details in the table below:

Funding band Recruiting a 16-18 year old (£) For business with less than 50 FTE For successful completion (£) Maximum incentive payments
6 5,400 2,700 2,700 10,800
5 3,900 1,950 1,950 7,800
4 2,400 1,200 1,200 4,800
3 1,800 900 900 3,600
2 900 500 500 1,900
1 600 500 500 1,600

Objective of the Levy

The levy aims to put the employer at the heart of the delivery of apprenticeships that are fit for purpose in industry that also increases their quality, holding both the employer and the training provider accountable.

 

What are the key dates I need to know?

  • April 2017
    • Apprenticeship levy collection begins
    • Apprenticeship Service Account launched
  • August 2017
    • Apprenticeship grant for employers funding end
    • No SFA allocations for apprenticeship delivery
    • Dual running of SASE frameworks and apprenticeship standards

What is the Apprenticeship Service Account?

The new service, which launches in April 2017, will assist the employer to:

  • Find an apprenticeship training course;
  • Choose a training provider; and
  • Advertise apprenticeship vacancies.

When will the levy be introduced?

6 April 2017 and will affect all employers in both public and private sectors and will be payable by employers whose pay bill exceeds £3 million in a tax year.

How will the apprenticeship levy be calculated?

The government has provided the following example calculations:

Example one

  • Employer of 250 employees, each with a gross salary of £20,000 would pay:
    • Pay bill – 250 x £20,000 = £5,000,000
    • Levy sum – 0.5% x £5,000,000 = £25,000

Allowance of £15,000 is taken into account so a payment of £10,000 would be payable.

Example two

Employer of 100 employees, each with a gross salary of £20,000 would pay:

  • Pay bill – 100 x £20,000 = £2,000,000
    • Levy sum – 0.5% x £2,000,000 = £10,000
    • Allowance of £15,000 is taken into account there would no annual levy payment.

How will the apprenticeship levy be paid?

It will be collected monthly by HMRC through PAYE and is likely to be payable with remittances for Income tax and National Insurance contributions (NICs). The pay bill will be calculated on total employee earnings that are liable to Class one secondary NICs.

What happens if I run multiple payrolls in my business or my business or charity is connected to another?

A connected person rule, similar to the one used for the Employment Allowance, will mean that employers who operate multiple payrolls will only be able to claim one allowance for the levy.

What can you spend the levy on?

The apprenticeship levy must be spent on an approved apprenticeship standard or framework. This can mean new apprentices or existing staff that would qualify for an apprenticeship*.

*Apprenticeship funding is available based on an individual’s eligibility for an apprenticeship so may not be available to all prospective apprentices.

What is the difference between, apprenticeship frameworks and an apprenticeship standard?

Existing frameworks (SASE) Trailblazer apprenticeships
Initial assessment Initial assessment

On and off the job training:

  • Mandatory qualifications
  • Functional skills
  • Personal learning and thinking skills
  • Employer rights and responsibilities

On and Off the job training:

  • Qualifications are not mandatory
  • Functional skills
  • Formative assessment of behaviours
Gateway
End assessment
Completion and certification Completion and certification
Occupational competence Occupational competence

What apprenticeship standards are currently available?

We are working with both BIS and a group of employers to develop an advanced apprenticeship standard in payroll and assessment plan for approval.

In time we will also launch an employer group to develop a higher apprenticeship standard in payroll.

A number of standards have been approved and can be found at https://www.gov.uk/government/collections/apprenticeship-standards

What will happen with any apprenticeship levy that is not spent?

Any apprenticeship levy funds that are not used by employers will be reallocated to employers that wish to fund quality apprenticeship training.

How will this be managed?

A new independent body; the Institute for Apprenticeships, will be established during 2016 and will be operational in time with the introduction of the apprenticeship levy that will regulate apprenticeship quality and will also advise on funding caps, apprenticeship standards and assessment plan sign off.

Booking events

Do I have to be a member of the CIPP to enrol/book a training course or event?

No, and students receive student membership of the CIPP for the duration of their studies.

There is a course listed on your website which I wish to attend but I can't find a list of dates?

If there are no dates listed for a training course on our website then this course is not running within the next three months. However, if you wish to attend a course which is not scheduled, email training@cipp.org.uk as we may be able to run the course internally, or if we have enough interest schedule an additional date.

Certificate in Pensions Administration - online qualification

How long does this qualification take to complete?

This is a nine month course.

How much time will I need to invest each week?

Recommended study time is seven hours per week.

When does this qualification start?

There are two intakes, spring and autumn.

How much does this qualification cost?

£1,045+VAT, which includes student membership of the CIPP for the duration of your studies. Please contact education@cipp.org.uk for multiple booking discounts.

Chartered Status

Can you explain the CIPP's designatory letters?

The CIPP's designatory letters will be: associate ACIPP, Full MCIPP or MCIPPdip (if diploma qualified), Fellows FCIPP or FCIPPdip (if diploma qualified) and FCIPP MSc (if qualified to MSc level)

Does this mean there will be a dual level of membership - Chartered for those who are participating in the CPD, and ordinary membership for those who do not commit to CPD?

There will be differing grades of membership to accommodate the different levels within the payroll profession, i.e. fellow, full, associate and affiliate members. In order to maintain being fellow or full member, members have to participate in the Institute's CPD scheme, in which they have to provide evidence of their ongoing technical and experience development. Under the rules of the Charter, the Institute has to be rigorous in assessing CPD requirements amongst its fellow and full members. If these members fail to demonstrate adequate evidence of CPD, they will not be allowed to use the designatory letters 'MCIPP' (or 'MCIPPdip' if they are diploma qualified) after their name. To summarise, any member who uses 'CIPP' after their name has to demonstrate a sufficient level of commitment to the Institute's CPD scheme.

How will this affect retired members?

Since achieving Chartered Status, retired members become retired members of the CIPP. However, if a retired member wants to use 'CIPP' after their name, they will have to demonstrate commitment to CPD. It is not mandatory for this status of membership, but in order to have the letters, they have to show active participation in the Institute's CPD scheme. This can be easily done through keeping up to date with News On Line and Professional in Payroll, Pensions and Reward.

I am concerned that CIPP membership fees may be increased significantly by becoming Chartered and that CPD may be a costly exercise for members.

Becoming a member of the CIPP and demonstrating CPD does not mean that there will be increased costs for training and development. Keeping up to date, and developing and maintaining skills can be done through a number of channels, and as a member, you are already utilising a number of them. If you read News On Line and Professional in Payroll, Pensions and Reward, attend free meetings such as the CIPP's Member Forums and National Meeting, and make use of our new podcasts then you are demonstrating CPD, all we ask is that you document this in the online CPD tool. You can find out more about CPD and the online tool by emailing cpd@cipp.org.uk. Regarding the cost of membership, the CIPP will not be increasing membership fees just because we have achieved Chartered Status. There will be, as with every year, an annual review on the cost versus the benefits received, and costs may increase in line with the rate of inflation, and/or associated costs of delivering the benefits to members.

Will the fees remain the same? Does this mean that the current membership will cease?

The CIPP will not be increasing membership fees just because we have achieved Chartered status. There will be, as with every year, an annual review on the cost versus the benefits received, and costs may increase in line with the rate of inflation, and/or associated costs of delivering the benefits to members. With regard to the current membership structure, these will remain exactly the same except that members will now belong to the CIPP, not the IPP. As it is now, there will be differing grades of membership to accommodate the different levels within the payroll profession, i.e. Fellow, Full and Associate Members and within each of the three there will are subsets to accommodate international and retired members. Under current CIPP membership criteria and rules, Affiliate Members do not have to be qualified, and therefore cannot use letters after their name. They are likely to work in payroll but this is not necessary to become an Affiliate Member. They may just have an interest in payroll and want to keep up to date on developments in the industry. Therefore, they will be Affiliate Members of the CIPP, but they will still not be allowed to use the designatory letters 'CIPP' after their name. Full and Fellow members are qualified, either through professional qualifications or experience, and this gives them a higher standing and enables them to use the letters 'CIPP' or 'CIPPdip' for diploma qualified individuals after their name. CPD is already mandatory for these grades of membership and therefore they automatically become members of the CIPP once the Charter is granted.

CPD

Do employer-related CPD schemes qualify as well as the CIPP CPD scheme?

As long as this is evidenced, yes.

Do I have to attend numerous training courses and events to participate in CPD?

No. CPD is any form of continued learning and therefore can include informal learning such as reading an article in News On Line or Professional in Payroll, Pensions and Reward magazine which contributes to your development. You'd be surprised how much CPD you do on a monthly basis without even realising. Of course there may be some things that you will need more formal, or interactive methods of learning - such as a CIPP National Meeting, or attending a training course of conference - but you are not obligated to attend these events if they are not necessary to your development.

Does this mean without evidence of CPD we lose our membership of the CIPP or just the chartered body? Within payroll you are always in CPD due to legislative and IR changes.

You highlight a very true and accurate point, "within payroll you are always in CPD due to legislative and IR changes". To evidence that you are keeping up to date all we ask is that you utilise the online CPD tool. It is quick and simple to use so should not take too much time and effort to do so. If you are a fellow or full member, it is a mandatory requirement to participate in the Institute's CPD scheme, in which you have to provide evidence of your ongoing technical and experience development. This does not change when once the Institute becomes the CIPP - fellow and full members are still obligated to fulfil their CPD requirements. If these members fail to demonstrate adequate evidence of CPD, they will not be allowed to use the designatory letters 'MCIPP' (or 'MCIPPdip' if they are diploma qualified) after their name. However, they will remain fellow or full members of the CIPP.

How is CPD measured, will there be extra work involved?

That depends on your current processes. CPD is measured through setting learning objectives for the year, which is normally done at appraisals anyway. We suggest that three learning objectives are set and measured using KPIs which you agree with your CPD monitor (usually a line manager). If you don't currently set objectives during your appraisal process, drop us an email and we will be happy to help.

I have completed CPD through another Professional body; do I need to take part in CIPP CPD scheme?

You would not need to complete further CPD, but we would encourage you to record the achievement on the CIPP tool as evidence.

I learn more on the job than in a classroom and having to force employers to pay for costly training and seminars just to prove this will be justly unfair.

As one of the most effective training methods you can use, on the job learning counts towards CPD, as does keeping up to date through other free learning tools, such as News On Line, Professional in Payroll, Pensions and Reward magazine, national forums and podcasts from the policy and research team. All we ask is that any learning and development is evidenced. The CIPP does not want becoming chartered to impact on our members financially. Chartered status should have, and has had, a positive impact on current members, students and the payroll industry as a whole (including employers).

If I were unable to show CPD as currently not in contract of employment what would happen to membership?

You do not have to be employed to keep up to date and demonstrate CPD. In fact, it can be argued that it is more important for you to demonstrate CPD so that when you are going to interviews you can show employers that you are still aware of current legislation and how this affects payroll. Having knowledge and developing skills on the job is one thing, but demonstrating that you have done so even out of employment shows commitment and dedication to ensuring that you strive to be the best. As long as you maintain your membership, and do not let it lapse, and you continue to read and learn from News On Line, Professional in Payroll, Pensions and Reward magazine and other benefits provided to you, then your membership status will not be affected.

Unfortunately, my employer will not pay for any training or development. So depending on the cost involved, I may not be able to continue membership.

Demonstrating CPD does not mean that there will be increased costs for training and development. Keeping up to date, and developing and maintaining skills can be done through a number of channels, and as a member, you are already utilising a number of them. If you read News On Line and Professional in Payroll, Pensions and Reward magazine, attend free meetings such as the CIPP's national forums and national meeting, and make use of our new podcasts then you are demonstrating CPD, all we ask is that you document this in the online CPD tool - you can find out more about CPD and the online tool by emailing cpd@cipp.org.uk

What evidence of CPD would you need?

All that is required is that any learning and development is documented in the CIPP's CPD tool. The CPD tool is already being used by Full and Fellow members, and you can find out more about using this tool by emailing cpd@cipp.org.uk or visiting www.cipp.org.uk

What is meant by commitment to CPD? Does this mean gaining a professional qualification?

CPD is an area that raises a number of questions, and people often associate this with qualifications and training. However, this is not always the case. CPD should be about identifying areas where development is required, and skills need to be maintained, and then identifying the best way for the individual to achieve them. Areas which count towards CPD include: Reading regular news updates through News On Line and Professional in Payroll, Pensions and Reward magazine, Any increase in knowledge as a result of utilising the Advisory Service, or online discussion forums, Attending Member Forums, the CIPP National Meetings, conferences, or any other event where you have learnt something that will meet your learning objectives, On the job learning, And, of course, professional training and qualifications

Credit Unions - questions from payroll professionals

Instructions to deduct or stop payments

The credit union would advise the employer when to start and when to stop, along with any adjustments by means of the schedule.

Will payroll be required to process refunds?

No any monies will be paid and or refunded directly by the credit union.

How does the employer notify the credit union of a leaver?

This information would be provided via the payment schedule.

Can the schedule be electronic?

Yes the employer/service provider can work with the credit union to receive and send a file electronically that could be uplifted directly into the payroll, subject to payroll software ability.

What about part months or payment in advance etc.

The schedule would take account of full month/weekly etc. deductions only and where an individual starts part way through a month it would be expected to start the following month/week etc. Where a person leaves part way through the month it is expected no deduction would be taken but instead the employee would be flagged as a leaver.

Could I be accused of unlawful deduction from wages?

No an agreement would be signed between the credit union and the employee; similar to trade union subscriptions, payroll giving etc. A schedule would be provided by the credit union each pay period.

Payroll frequencies i.e. what happens if weekly?

It would be a deduction from each pay period so weekly; however agreement could be made with the credit union to pay all contributions over monthly.

There is speculation credit unions would require payment into their account on or before payday? This is not practical for payroll due to potential adjustments etc.

The payment date would be agreed between the employer/service provider and the credit unions. Many payroll professionals would expect to be given time to pay by 19th of the following month. However it is important to recognise that until the payment is received from the employer, the savers account will not reflect any of the monies deducted.

Would it be a standard deduction?

Yes the credit union organisation would supply a schedule of deductions to be made in pounds.

Can we pay credit unions via Bacs?

Yes

Will there be fluctuating balances?

There might be but this will not be a concern for the employer as the credit union would advise the deduction amount and when to stop.

How would the company know it was a genuine credit union deduction?

It is expected each employer would sign up with a particular credit union supplier and this would need to be confirmed by the employer to their payroll service provider.

Events and Training Courses

Do I have to be a member of the CIPP to enrol/book a training course or event?

No, and students receive student membership of the CIPP for the duration of their studies.

Do I need to bring any material with me to an Event or Training course?

No, a notepad and pen will be provided at all Events for delegates to make notes. The slide presentation will then be available on the CIPP website after the event. All course material for a Training course will be provided on the day of the course. For a training course we suggest you bring a calculator and a carrier bag.

I am interested in sitting the National Payroll Certificates and can see that there are Learning and Revision days. Do I have to do the Revision Day before I sit the exam?

Yes, the Revision Day is a compulsory part of the National Payroll Certificates

The website says which city or town the course is in but not the actual venue details, can you tell me where the course will be held before I book?

We provisionally book course venues and only confirm the actual venue when we have an idea of the numbers of delegates booked. Therefore, the venue details will be confirmed to delegate that have booked no later than seven working days prior to the course date

When will joining details for Events and Training courses be issued and what will they include?

Joining details are issued 2 weeks prior to an Event and as soon as a Training course is confirmed. Joining details will include the start and end times and venue location details.

Can you advise which the most suitable course is for me?

If you contact the office on 0121 712 1000 or email admin@cipp.org.uk we can discuss your requirements and help you select the most suitable course.

Can you provide me with costs and dates of in-house courses?

We can run in house courses on a date that best suits you and your organisation. The costs depend on the number of employees attending the course, which course, whether you have the content tailored specifically for your organisation etc. Therefore, to obtain a quote for in house training please email details of what you require to admin@cipp.org.uk

Do you offer discounts for more than one person booking onto a training course?

Discounts are available on public training courses for three or more people; however it may be more cost effective for the CIPP to deliver training in house if you have a group of people you wish to have trained. To discuss which option is best for you contact us on admin@cipp.org.uk

Friends of automatic enrolment

As far as I know I do not automatically enrol anyone unless they are on my payroll. I understood from guidance provided that it is the responsibility of the agency to automatically enrol them?

In the case of a worker supplied by an agency or other third party, who has the employer duty really depends on who has the legal responsibility for paying the individual or, if that is not clear, who actually pays the individual. So, it could be either the agency or the principle (the company which has requested the worker). Please find below a direct link to the Pension Regulators website which I have found useful.

www.tpr.gov.uk/docs/detailed-guidance-1.pdf

This is the detailed guidance for employer’s chapter 1. Please refer to paragraph 21.

Can you advise if the automatic enrolment earnings threshold is being increased to £11,000 in line with the tax code changes?

No, the earnings threshold is remaining at £10,000.

See www.thepensionsregulator.gov.uk/automatic-enrolment-earnings-threshold.aspx

Can you give an example of maternity and auto enrolment?

Yes and please note the definition of qualifying earnings does include statutory maternity pay.

Example 1: When her employer reaches its staging date of 1st May 2013, Sarah is in the twelfth week of maternity leave and is receiving minimum statutory maternity pay. As her normal gross salary is £300 p.w. her pay is now calculated as the lower of £136.78 and 90% of her average gross weekly earnings. Her employer assesses Sarah's earnings in the relevant pay reference period and establishes these fall between the minimum level for qualifying earnings and the earnings trigger, making her a non-eligible jobholder. Her employer has an ongoing duty to continue to assess Sarah on the first day of each pay reference period. As Sarah is not already an active member of a qualifying scheme provided by her employer, her employer will need to send her information about her right to opt into the employer's scheme.

Example 2: By contrast, Hannah, who earns the same salary as Sarah has recently gone on maternity leave and is still receiving 90% of her average gross weekly earnings - £270 when she turns 22 years of age. Her employer, which has passed its staging date, identifies that the pay she is due to earn in the relevant pay reference period is above the earnings trigger. Consequently, Hannah’s employer must automatically enrol her into its scheme. During the paid period of maternity leave, the employer need only base its contributions on her actual level of earnings as Hannah hadn't joined the scheme prior to going on maternity leave. If Hannah is also required to contribute, her contributions will be based on the earnings she actually receives – which, in this case, will reduce to £136.78 p.w. from the seventh week of maternity leave. If this does not help then you can also look on The Pensions Regulator’s website for further information, although they are outside automatic enrolment (e.g. employment law relating to benefits whilst on maternity leave).

Could you please let me have the details information regarding automatic enrolment which will help me to explain in details to my clients?

Please find below two links to the Pension Regulators website which I have found useful in the past. In addition to this you may be interested to know that the CIPP does provide a course on this subject which may be useful to you. Its aim is to assist payroll professionals in understanding pensions and automatic enrolment. www.tpr.gov.uk/docs/the-essential-guide-for-automatic-enrolment.pdf

This link to the Pension Regulators website may be a good starting point for your clients www.tpr.gov.uk/en/employers/duties-checker is a useful tool which takes employers through a step by step guide to check what duties apply to them. www.tpr.gov.uk/doc-library/automatic-enrolment-detailed-guidance.aspx this link again to the Pension Regulators website may assist you if you wish to understand the subject more.

If a payroll is made up of directors only, do you have to make a declaration of compliance?

A company Director who is not working under an employment contract is not a worker and so is not subject to the automatic enrolment duties. If a director of a company is the only employee, they are not a worker and will not be subject to the duties. So, if all of the staff in a company are directors and no more than one of them is an employee, the company will not be subject to the employer duties and does not have to make a declaration of compliance. If the company has received a letter from The Pensions Regulator with a staging date, the company should inform the regulator they are not an employer at https://automation.tpr.gov.uk/notanemployer. However, if there is more than one employee in the company (whether or not they are directors) then, yes, there will be employer obligations and you would have to make a declaration of compliance with The Pensions Regulator via the following link: www.tpr.gov.uk/employers/automatic-enrolment-declaration.aspx

Please note that there is a new regulation (as of 1 April 2016), that means for any director who is deemed to be a worker (and so is subject to the automatic enrolment duties), the employer may choose not to automatically enrol/re-enrol them (the director would still have the right to opt-in/join).

If we TUPE a group of workers across to our business (who have already been assessed and are in the scheme), would we need to re-assess? Also at what point in three years time do we re-assess them?

TUPE provisions operate in parallel to the Automatic Enrolment (AE) provisions. This means that an employer has to meet both their TUPE obligations and their AE duties. It is important to note that AE obligations do not apply to an employer before their staging date so, if an employer has not staged they will only have to observe TUPE obligations. If the new employer has already staged, it has all the normal TUPE duties from the date of transfer and it should treat any TUPE'd workers as new employees for automatic enrolment purposes. If the old employer had staged, the new employer must ignore any history of automatic enrolment, including opt ins and opt outs. If the new employer has already staged, then the new employer should assess the TUPE'd workers.

For each TUPE transferred employee, the new employer could either:

  • use contractual enrolment to ensure that the employee is an active member of a qualifying scheme at the point of assessment (ie on joining the new employer, or when they first trigger automatic enrolment after joining or at the end of postponement if used); or
  • for those who meet the age and earnings criteria (ie are an eligible jobholder), automatically enrol them into an automatic enrolment scheme, with effect from their joining (ie transfer) date. The new employer can use worker postponement to give it time to contractually enrol the transferred employees into a TUPE compliant scheme, with effect from the date of the transfer of their employment contracts. If the new employer has a qualifying scheme which is NOT an automatic enrolment scheme (eg it does not have a default fund), it would have to use contractual enrolment (as you cannot automatically enrol anyone into a scheme which is not an automatic enrolment scheme. In any case, they would need to be enrolled into a pension scheme which also satisfies their TUPE obligations. The new employer would re-assess the transferred employees (at the same time as all other appropriate staff) on the employer’s next cyclical (three yearly) reenrolment date (the old employer’s staging or re-enrolment date is irrelevant).

Member asked if a new employee transferred under TUPE, who wasn't previously automatic enrolled, can have 'postponement' applied to them?

Yes, this would be ok, assuming they were not already a member of the old employer’s pension scheme (if they were, TUPE obligations may apply). Under the automatic enrolment legislation, the individual concerned must be treated as a new joiner and therefore the new employer duties would only commence on the staging date of the acquiring company.

Postponement can be used at:

  • for all or any staff at the employers staging date,
  • for any new joiner
  • when someone turns 16 or 22
  • and when the worker meets the criteria to be an eligible jobholder.

Other TUPE requirements may also apply.

Scenario - Agents, costs, charges

Q: I wonder if you can help me. I am a Payroll agent for about 50 clients payrolls. Most of the payrolls have 2 to 3 employees, with about 10 of the payrolls having 5 to 20 employees.  The clients are now starting to ask about automatic enrolment and would I act as administrator for their pension schemes and become the primary contact.

A: Unfortunately, we are not able to give advice on how much a bureau should charge for their services, as it is outside our remit. However, The Pensions Regulator has recently released some experiences of costs incurred by employers to set up and administer pensions and outsourced services please see www.thepensionsregulator.gov.uk/working-out-your-clients-costs.aspx In regard to your second query, where an employer does not have any a workers assessed as eligible jobholders on their staging date, no, until a pension scheme is actually needed. If an employer does not have any workers who are eligible jobholders on their staging date, they do not need to set up a pension scheme (yet). However, if any of their workers do at staging or after wishes to exercise their right to opt in or join a pension, then the employer would then have to set up a pension scheme - within 6 week from the start of the first pay reference period (PRP) following the date PRP in which the date of the request to opt in or join is received. In the scenario above one employee is over 74 and therefore outside of the scope for automatic enrolment, but the other, depending on their earnings, could have the right to opt in and receive employer contributions into their pension (i.e. be classed as a non-eligible jobholder). However, an employee who does not earn above the threshold of £5,824 per annum (pro-rated for the pay period in use) and who is aged between 16 and 75 can ask to join a company pension scheme (which can be any UK tax registered scheme, but does not have to meet the automatic enrolment criteria) and the employer can choose to contribute or not (ie be classed as an entitled worker). Further information can be found on The Pension Regulator's website – see their ‘Duties Checker’ at www.thepensionsregulator.gov.uk/en/employers

Scenario - Alternative schemes, non-qualifying schemes

Q: The employee was automatically enrolled into a pension scheme, but they are now eligible to go into a non-qualifying company scheme which is only open to certain employees.   Am I right in thinking that because it is not an automatic enrolment scheme, they would have to cease membership of the automatic enrolment scheme and that the employer cannot automatically stop the membership of the automatic enrolment scheme?

A: Yes, the employer cannot force an employee or induce them to opt out or cease membership of a qualifying scheme or an automatic enrolment scheme. The employer should ensure they do not take any action for the sole or main purpose of inducing a (non-eligible or eligible) jobholder to leave or not join a qualifying scheme (e.g. by offering to pay more into a non-qualifying scheme). However, they could avoid this by offering the same terms irrespective of whether or not they ceased membership of the qualifying scheme (so that it was a “level playing field”).

For example, take the case where an employer was paying 1% into the automatic enrolment (AE) scheme and would normally pay 3% into the other (non-qualifying) scheme if they joined it. If the terms and conditions were such that, if they remain a member of the AE scheme the employer would only pay 2% into the non-qualifying scheme and would continue to pay 1% into the AE scheme as well, this could remove the incentive to cease membership of the AE scheme (if the definition of pensionable earnings of the two schemes is different, then the percentages may need to be adjusted or the values calculated in £ pounds).

Scenario - Apprentices

Q: We have two new apprentices who do not meet the criteria for automatic enrolment and we have no other scheme for them to opt into, is there anything for us to do?

A: There is still a duty to communicate to all workers, even if they do not meet the eligible jobholder criteria. The employer must write to them to tell them they have the right to Opt in or join a pension. An employer does not need to set up a pension, until they need one (ie if and when they need to automatically enrol someone or someone asks to opt in or join a pension). If one of their staff asks to become a member of a pension, then they must be assessed based on their age and qualifying earnings they are due to be paid (in the pay reference period in which the date of request is received). If they are assessed as an 'entitled worker', they are entitled to join a pension scheme of your choice, but the employer is under no obligation to make a pension contribution. You can choose to let them join a different scheme to the one you may be using for automatic enrolment. If they are assessed as a ‘non-eligible jobholder’, they must be enrolled into an automatic enrolment scheme (even if this means setting up a pension scheme just for one employee). The employer must also make a pension contribution. The employer must also make a declaration of compliance (within 5 months of its staging date).

Scenario - Breach, backdated contributions, employer responsibility

Q: It has recently come to light that one of the departments in our company did not automatically enrol an employee when they joined in June 2014.  They were age 25 and earning above the threshold . What would we need to do to correct this error?  I am assuming I need to backdate his employee and employer contributions back to the date he joined . Your advice would be appreciated.

A: You would have to backdate the automatic enrolment for this person - I recently spoke to The Pensions Regulator on this very same subject and they said yes the employer had the obligation to backdate both employer and employee pension contributions - and are restricted in the amount of contributions the employee could be asked to pay (to three months’ worth). The employee should have the option to pay or not pay their backdated contributions – the employer back contributions must be paid in any case. TPR would also expect some kind of easy payment plan to be available to the employee, to spread any back payments over a period of time. If more than 3 months of backdated contributions are due, The Pensions Regulator has the power, at its discretion, to insist the employer also pays the employee contributions.

Scenario - Directors, no contracts

Q:  I have been asked whether a limited company with two directors falls under the need to be compliant for automatic enrolment, even though no salaries are being paid. My understanding is that they would need to be compliant because the directors receive remuneration to work for the company, and therefore there is an implied contract.

Are you able to confirm that this is the case?

A: A company director who is not working under an employment contract is not a worker and so is not subject to the automatic enrolment duties. However, you must remember a contract can be verbal, implied and/or written and, if both directors are working under a contract of employment, then there will be automatic enrolment duties for both directors. But if a director of a company is the only employee, they are not a worker and will not be subject to the duties. If all of the staff in a company are directors and no more than one of them is an employee, then the company will not be subject to the employer duties and does not have to make a declaration of compliance. If the company has received a letter from The Pensions Regulator with a staging date, the company should inform the regulator they are not an employer at https://automation.tpr.gov.uk/notanemployer.

If the company's circumstances change so that there are at least two people working for the company under contracts of employment (whether directors or other staff) then you will need to inform The Pension Regulator of this as soon as possible. However, if both directors are working under an employment contract, there is a new regulation (as of 1 April 2016) that means for any director who is deemed to be a worker (and so is subject to the automatic enrolment duties), the employer may choose not to automatically enrol/re-enrol them (the worker would still have the right to opt-in/join). You can find some frequently asked questions about directors and automatic enrolment on our website.

However, it is worth noting that dividends and expenses are excluded from qualifying earnings - and dividends or salary in themselves are not proof of there being an employment contract.

Scenario - Dual membership, reduced earnings, variable pay

Q: If a worker notifies the employer that he/she would like to be a member of the pension scheme but because they do not have qualifying earnings they decide to make contributions directly to the pension provider, as I understand that they can.

What will then happen if the workers earnings go over the qualifying limit therefore auto enrolment is triggered with both employee and employer contributions being made to the pension scheme.
Will it be up to the worker to stop the direct contributions that they make into the pension scheme because they may not wish to make the additional contributions? I am thinking of employees whose pay can vary from month to month.  I hope that you can help or point me in the right direction?

A: Yes, it will be up to the employee to stop the contributions they make directly to the pension scheme. However, where pay varies from pay period to pay period, the employer may use postponement when the employee becomes eligible for automatic enrolment. The employer chooses a postponement period of between 1 day and 3 months and must inform the employee of their actions by letter or email within 6 weeks of the assessment date. This allows the employer to assess at the chosen a predetermined later date (where the expectation is that the earnings now fall below the pay period threshold). If and automatic enrolment is not triggered at the end of postponement, the employee will need to be monitored for future changes (eg age or earnings fluctuations). However, if the employee’s earnings are still at a level to make them eligible for automatic enrolment once you get to the end of the postponement period, then you must enrol the employee in an automatic enrolment pension scheme. Postponement may be used more than once, but you cannot apply another period of postponement whilst another is still in force. This means if someone is assessed as eligible on the last day of postponement, you cannot apply another postponement at that point, they must be automatically enrolled.

Scenario - Early retirement, final salary, DB

Q: We have an employee who was in our Final Salary pension scheme whose contributions stopped because she reached the pension age set up for this particular scheme, but she has yet to reach the statutory retirement age.  My question is: as an employer, do we have to automatically enrol this employer into our GPP, which is our qualifying scheme for automatic enrolment?

A: It does depend on the scheme rules, but a member would typically have to confirm to the pension provider that they want to start taking benefits (eg draw a retirement income), so they would be choosing to cease membership at that point. If the date they cease membership of the final salary scheme is 12 months or less before the employer’s next re-enrolment date then, assuming they are eligible for automatic enrolment, the employer may choose whether or not to enrol them – or leave them until the following employer’s re-enrolment date. If they are re-enrolled into an automatic enrolment scheme (e.g. the GPP) and then opt out or cease membership again, they will need to be re-assessed at each following re-enrolment date (until they reach State Pension Age, after which they would not need to be automatically enrolled again). However, if the employee did not specifically ask or agree to cease membership of the Final Salary scheme, then when their membership stops it will trigger immediate re-enrolment - assuming the employee is a jobholder (eligible or non-eligible jobholder). You will need to automatically enrol the employee into an automatic enrolment pension scheme (of your choice, so presumably your GPP scheme) - if their earnings class them as an eligible (ice if they earn above the lower earnings level, irrespective of their age). They should be enrolled with effect from the day after they cease membership of the final salary scheme.

Scenario - Failure to enrol, breach, backdated contributions, contribution recovery

Q: Our payroll provider has failed to automatically enrol 4 members of staff since April 2015 due to an administrative error.  We will enrol them immediately, however, I am unsure as to whether we need to backdate to the date they should have been automatically enrolled and ask the employees to repay the contributions due. I cannot find any information about error correction on the Pension Regulator website.

A: Postponement could have been used up to six weeks and a day from the enrolment date (ie if the deadline for issuing a postponement letter, 6 weeks + 1 day after 1 April 2015, had not yet passed). Otherwise, the employer is in breach of the legislation. So, if an employer makes a mistake, they should tell The Pensions Regulator about the breach. The regulator’s approach is that an employer should take reasonable steps to put the worker back in the position they would have been in, if compliance had occurred on time. If this is within 3 months of the mistake, the employer should enrol them backdated to the original date, ensure backdated employer pension contributions are paid and give the employee the option to pay their backdated contributions (over a reasonable timeframe). If the regulator decides to take formal action against the employer - and the worker should have been enrolled more than 3 months ago – they have the power to require the employer to pay both their own and the employee contributions and may also require interest to be added to the outstanding contributions (although whether they require either or both of these will depend on the situation).

Scenario - Joiners, 1st assessment

Q: Please could you help me with clarification of automatic enrolment assessment date rules. We have already staged for automatic enrolment. We have a new starter whose first pay day is 25th September.  I don't see how we can assess his earnings until his pay is processed, so presumably his 25th September pay gets paid without auto enrolment pension deductions, and then we use that data to assess entitlement under auto enrolment, with a view to the first deduction being taken on 25th October. Is that correct, or do we have to manually assess his wages and deduct pension from his first wages on 25th September?

A: No, you are required to assess the new employee from their start date and auto-enrol them the first time they meet the age and earnings criteria for automatic enrolment. So, if on their first pay day of the 25th September they meet the criteria, you should enrol them from the beginning of the pay reference period or their start date (whichever is later). The first deduction from pay should be taken on their first pay day on 25th September (assuming they are eligible and, if this is for a part period of pension membership, that the scheme rules require a deduction in the first period). I would suggest that you refer to the detailed guidance found at the following link in order to confirm that this is the correct action to take - Detailed guidance no.3 – Assessing the workforce at www.tpr.gov.uk/employers/detailed-guidance.aspx.

Scenario - Leavers, notice period

Q: I have an employee who turned twenty two on the 21st April 2015. They were paid on the 24th April and their employment ceased on the 7th April 2015.  The employer staged on the 1st September 2014. My payroll software assessed them for automatic enrolment purposes and enrolled them but the Pension provider says this was incorrect because they left before they were 22, regardless of the fact that they were eligible during the relevant pay period.

A: A worker turning 22 should be assessed as of their birthday. The assessment is based on their total qualifying earnings in the pay reference period in which their birthday falls. However, in this case, they had ceased employment before the assessment day (their birthday), so there was no requirement to assess them, as at that point they were no longer working for the employer. So, yes, the pension provider is correct. In addition, please note that as of 6 April 2015, changes to the legislation mean that an employer can choose not to assess or enrol a worker in their notice period – in which case the worker would not be allowed to opt in or join during this period. This option applies, providing the end of the notice period is six weeks or less after the assessment date. There is further guidance on The Pension Regulators website.

Scenario - New employers

Q: One of our clients is changing from sole trader to limited company with effect from 1st May 2015. I have processed the final month payroll for the sole trader PAYE scheme and closed this off after submitting the year end declaration submission. After speaking to HMRC, I am happy that they will close the PAYE scheme, however, our client has received a letter from the pension regulator regarding the sole trade payroll scheme and wants to know how to proceed.  HMRC have advised that the information that the scheme has closed may or may not feed through to the pension regulator. Am I correct in thinking that the best course of action would be to contact the pension regulator to advise them that the scheme is closed so that no further correspondence is issued and obviously no penalties issued when a pension scheme is not set up!!

A: As your client has ceased trading as a sole trader and is now operating as a limited company, the limited company will be considered a 'new' employer. Any employer that did not exist or had no workers on 1 April 2012 will have its staging date determined by the date PAYE is first payable in respect of any of its workers – and will stage at some point from May 2017 onwards. To find out your client’s staging date, go to the regulator’s Duties Checker and enter your client’s new PAYE reference. You will be able to do this at www.tpr.gov.uk/en/employers by clicking on “Start Here”. This will take you through the steps that, on behalf of your client, you will need to be complete, including guiding you to the Declaration of Compliance portal.

To confirm to The Pensions Regulator that the sole trader has ceased trading, go to https://automation.tpr.gov.uk/notanemployer

Scenario - New PAYE, new company

Q: There is a possibility we may be taking on a new company's payroll from April 2016. Looking at the auto enrolment staging dates for new companies (during the period 2012-2017) it is not very clear how the staging date works under this circumstance. I know it is not dependent on volume of employees but would it take effect as soon as you started paying them or would it be at a later date depending when we set them up?  Are you able to clarify this at all or point me to a direction where I can find further information?

A: The employer duties apply to each employer from their staging date and the duties apply to all of the employer’s workers from that date. An employer’s staging date is based on the PAYE scheme or schemes that were being used on 1 April 2012. After 1 April 2012, any change to the PAYE scheme or schemes being used will have no effect on the staging date. However, any employer that did not exist (or had no workers), as of 1 April 2012, is classified as a “new employer” and will stage last, from May 2017 onwards. Their staging date for ‘new employers’ will be based on the date that PAYE income is first payable in respect of any worker – as shown in the table below.

Date PAYE income is first payable in respect of any worker staging date for ‘new employer’

From 1 April 2012 up to and including 31 March 2013 1 May 2017
From 1 April 2013 up to and including 31 March 2014 1 July 2017
From 1 April 2014 up to and including 31 March 2015 1 August 2017
From 1 April 2015 up to and including 31 December 2015 1 October 2017
From 1 January 2016 up to and including 30 September 2016 1 November 2017
From 1 October 2016 up to and including 30 June 2017 1 January 2018
From 1 July 2017 up to and including 30 September 2017 1 February 2018

To find an employer’s staging date go to: www.tpr.gov.uk/employers/tools/staging-date.aspx So, the PAYE reference number itself does not determine the staging date for a new employer, just the date it is first used. If a company changes their PAYE scheme reference, but is not a ‘new employer’, then their original staging date will still be the starting date for their employer duties.

Scenario - NHS staff, re-joining

Q: A nurse working for the NHS has decided to collect her NHS pension next year at the age of 60. She is planning to return to work after retirement on a different contract. She has been told that they will need to deduct pension contributions from her pay under the new contract. Is that correct as she will already be receiving her workplace pension?

Does the employer have to offer automatic enrolment in such cases or would it just be a case of opting out before any deductions have been made.  Can you advise if the rules are different if you are employed by the NHS?

A: No, the rules are no different if you are employed by the NHS. Anyone between 22 and under state pension age who is working in the UK would need to be automatically enrolled (if they earn above the earnings trigger), irrespective of whether they are drawing income from a pension or not. However, the employer’s duties will depend on whether the worker (ie the nurse) has a break in employment before coming back to work under a new contract. 1.

If she is deemed to have not been in continuous employment (for example, there is a gap between leaving and re-joining), then all history of opting out (as well as Opt ins and postponement) will be wiped clean once she has left the employer – and she would be treated as a new joiner when she came back under the new contract. So, on returning to work for the employer, the individual will need to be assessed and, like any other worker, if eligible, automatically enrolled. We understand that the NHS pension scheme rules would not allow the nurse to rejoin the NHS pension scheme and so she would need to be enrolled into some other automatic enrolment pension.

The nurse will be able to opt out of the new pension, but only after she has been enrolled (achieved active membership) and has been given the letter/email telling her she had been enrolled (she cannot opt out in advance). At re-enrolment, if the worker (ie nurse) is not an active (ie contributing) member of a qualifying scheme, she would need to be reassessed and, if eligible, re-enrolled – unless she opted out or ceased membership within the 12 months preceding the employer’s re-enrolment date, in which case she should be left until the following re-enrolment date (unless the employer wishes to re-assess her). 2.

However, if she is considered to have been in continuous employment, despite the change of contract, then the worker (nurse) would not need to be assessed until the employer’s next re-enrolment date. At re-enrolment, if the date the worker (ie nurse) ceased membership of the NHS scheme is within 12 months of the employer’s re-enrolment date, and then she should be left until the following re-enrolment date (unless the employer wishes to re-assess her).

In any case, once the worker has reached state pension age there will be no further duty to automatically enrol them, although they will have the right to opt in or join (up until their 75th birthday). There are no special rules for NHS employees, but there may be specific scheme rules and I have provided a link to the guidance you may require:

https://www.aohub.com/aoos/viewContent.actionkey=Ec8teaJ9VaqMqZZsXGPNaF7eOOGbnAEFKCLORG72fHz0%2BNbpi2jDfaB8lgiEyY1JAvAvaah9lF3d%0D%0AzoxprWhI6w%3D%3D&nav=FRbANEucS95NMLRN47z%2BeeOgEFCt8EGQ%2FHLCIrtYuIY%3D&uid=frsvcLdHNrI%3D&popup=HxapDW%2FMKd4%3D&freersslink=true

Scenario - Opt out notice

Q: If an employee joins a scheme on the 1st August, but by the 13th we have received an opt out notice. Does the first month of contributions still need to be processed, and they will receive the refund in the following month?
I believe that even if an employee opts out before payroll has run (if it is a monthly payroll) then the deduction still needs to happen. The payment is then sent off to the pension provider who in turn will refund it back to the company.

Can you confirm what I believe is correct?

A: No, if the opt out is valid and the money has not yet been deducted and payroll has not ‘closed’ (ie it is before payroll cut-off), then no deduction should be taken. Similarly, no money has to be given to the pension provider, if it has not yet been paid. If money has been deducted from their pay, then the employee should receive a full refund of all contributions on the next pay day (or the one after, if payroll cut-off has already passed when a valid opt out is received), irrespective of whether the employer has received any refunds from the pension provider at that time.

If you refer to The Pensions Regulator’s Detailed Guide number seven on the link (Opting out), this explains the opting out window, and that they have to have become an active member of the pension scheme and provided with the enrolment information. See points 16, 17 and 18, the opt-out have to have been received during the 'opt-out' window and not before, otherwise it is an invalid opt-out. Once you have assessed if the opt-out is in the ‘opt out’ window and is a valid opt-out, then yes you can take them out of the scheme. The new member’s pension contributions do not have to be sent to the pension provider if payment has not yet been made. They can be withheld for up to 3 months after the due date of the 19th or 22nd of the month following the month in which the deduction was made. This allows for opt out refunds to be handled by the employer if they wish, so long as the criteria as mentioned above has been met. If the employee chooses to stay in the scheme then all withheld funds must be paid over after the three month withholding period.

The guidance I have referred you too is quite good and easy to understand and also give examples, please the link below. www.thepensionsregulator.gov.uk/doc-library/automatic-enrolment-detailed-guidance.aspx#s11503

Scenario - Opting out, re-enrolment

Q: Employees are automatically enrolled on joining the company. They can then opt out within the correct timeframe as is their right. Two months later the company is legislatively obliged to go through the 3 year re-enrolment process.

Does the company re-enrol every eligible employee including the one who has just opted out - forcing him to go through the opt out again, and - going forward - are individuals who have joined during the first three year period re-enrolled on the 3rd anniversary of their joining or in bulk with the other employees - even if they have only been in a short time?

It feels important to be clear about this so that we can communicate with our employees and let them know what to expect.

A: The Pension Regulator's detailed guidance says the employer should not re-assess and re-enrol workers who have opted out or ceased active membership of a pension scheme within twelve months of the re-enrolment date. An employer may choose any date within a 6 month window (starting 3 months before the 3rd anniversary of their staging or previous re-enrolment date). However, new regulations introduced in April 2015, gave the employer the option of ignoring the date someone ceased membership / opted out for re-enrolment purposes (their payroll or assessment software may not even have a record of their previous opt out date). This means the employer may choose to re-assess (and re-enrol those who are eligible) all workers who have previously opted out or ceased membership of a qualifying scheme, even those who did this within 12 months of the employer’s re-enrolment date.

Just to be clear, it is only those people who the employer has already automatically enrolled (or who have previously been an eligible jobholder whilst an active member in one of this employer’s qualifying schemes) - but have since ceased membership - who should be re-assessed on the re-enrolment date. Any worker who has not yet been automatically enrolled and is being monitored each pay period should continue to be assessed each pay period (this is a separate activity).

For example, if someone opted out ten months prior to the re-enrolment date there would be no requirement to re-enrol that employee until the employer’s following re-enrolment date (ie the one occurring around 3 years and 10 months after the person opted out, in this example). However, the employer could choose to do so if they wished (or they could not or did not want to check the ‘opt out’ date). It is not the anniversary of when the employee was originally enrolled or opted out, but it is on the employer’s re-enrolment date that all such workers are reassessed. This could lead to a period of about 4 years between re-enrolments for some employees, depending on the timing involved.

Additionally, you may wish to refer to the May 2015 issue of the CIPP's Professional in Payroll, Pensions and Reward magazine, on page 29. This is an article by Neil Tonks on re-enrolment, which is very informative. For further information, please refer to the Detailed Guidance (booklet 11 on automatic re-enrolment, paragraph 35, bullet point 1) available on The Pension Regulator's website at www.thepensionsregulator.gov.uk/docs/detailed-guidance-11.pdf

Scenario - Overseas employees, not working in UK

Q: One of the employers we process the payroll for, employs people who work in the Antarctic. They have a month training in the UK and then work only in the Antarctic from then on. There is some uncertainty as to whether or not they should be in the company pension scheme. Previously they were classed as not eligible, but as they are employed by a UK company I believe that they should be enrolled into a pension scheme.

Would the rules be different if they do not work in the UK - which seems to be the only reason they are classed as 'not eligible'. We process the pay for other companies who have always included their employees in the pension scheme regardless what country they work in. Are there rules that I am not aware of?

A: It does not matter if the employer is a UK company or an overseas one. An employee has to be ‘ordinarily working’ in the UK to come into scope of the automatic enrolment legislation. As far as we can tell from the question, under contract' - tithe employees are not ordinarily working in the UK and, if this is the case, there would be no employer duties for them. However, it is the employer who should determine whether they are ordinarily working in the UK or not.

For further information, see paragraph 34 of Detailed guidance no.3 – Assessing the workforce at www.tpr.gov.uk/employers/detailed-guidance.aspx With regard to the second point (relating to other companies who have always included their employees in the pension scheme regardless what country they work in), I can only suggest you these employees should be re-assessed based on the guidance.

If you are still unsure about these other employees it may be best to contact The Pensions Regulator to ask for guidance regarding this particular situation.

Scenario - Personal service worker

Q: We have a client with a financial controller who is paid via invoice. This gentleman has his own business and invoices for services provided on a monthly basis. He has 12 clients in total and spends 60% of his time with this one company. I assume he is classed as a worker but how is automatic enrolment dealt with when he is not paid through payroll (he is going to opt out from the AE scheme)?

A: Whether an individual is classified as a worker is not based on the proportion/percentage of time an individual spends working for a particular client. Your client will need to consider a number of factors to determine if this person falls under the automatic enrolment legislation (ie if they are a worker or not).

1. The first step is to decide if your client would be considered the “employer” or not. Does your client pay the individual (eg this financial controller as a named individual) - or do they pay another company or business for this work? If the individual works for another company or his own limited company and your client pays that company, then that company is considered the “employer” and, if there are any employer duties regarding this individual, it will not be your client’s responsibility.

2. But, if your client does pay the individual (perhaps they are a sole trader), then they will need to consider whether this is a personal services contract or not. Is the individual (ie the financial controller in this example) expected to do the work themselves – or could they (without permission from your client) substitute another person or subcontract the work? Does the contract specify this person must do the work? If this contract is not personal, then your client will not have any AE duties for them. To give another example, a client could have a contract for a ‘gardener’, but if no person was named in the contract (if written) and anyone could turn up to mow the lawn and work on the garden etc, then this would not be a person services contract and the client would have no AE duties for them.

3. Otherwise, if your client pays the individual and that person has to do the work - your client needs to make a judgement on whether or not the individual (the financial controller, in this case) is providing services to the company as part of his own business. To do this, your client needs to consider the nature of the contract (including, but not limited to, any written contract or terms and conditions). Please note that if this were to be tested in court, judges in previous employment law cases have put great importance on actual practice and may disregard written terms if this in contradiction to what actually happens). There are a number of factors that will help your client decide if the individual is providing the work/services as part of their own business.

Does your client:

  • Have control of the hours the individual works?
  •  Provide any employee benefits (eg holiday or sick pay etc)?
  • Bear all the significant financial risks in carrying out the work (ie the worker is not financially responsible for their faulty work)?
  • Consider the individual to be part of their own organisation?
  • Provide what is required for the individual to carry out the work (eg tools, office space, equipment etc)?

If all or most of the above are true, it would be reasonable to consider that the individual is not undertaking the work as part of their own business and so are subject to automatic enrolment. Otherwise, they are truly self-employed and are exempt and the client would have no AE duties for them. Please see detailed guidance no 1 Employer duties and defining the workforce, section 15 onwards for more detail. If an individual is considered a worker and subject to AE, but is not paid through payroll, your client will still have to assess the individual and, if eligible, automatically enrol them and make regular deductions from the money they are due to be paid. This could be done as a manual process, but many employers put them on their payroll so that the payroll software can carry out the assessment and deductions, but do not deduct tax and NI (assuming their payroll software has the capability of doing this).

Scenario - Postponement, assessment deferral

Q: A postponement period of 3 months is being used for Auto Enrolment. Postponement is applied on the date criteria to be an eligible jobholder is met. The Pensions Regulator guidance on postponement (Document 3A - page 27, paragraph 101) states 'on the deferral date, the employer must assess the worker to whom they issued the notice to see if they remain an eligible jobholder'.

Does this mean they should be assessed on the deferral date only or should they be assessed each month? Example, eligible job holder in October - postponement notice issued, non-eligible jobholder in Nov, entitled worker in Dec, eligible Job holder in January - should this person be Auto Enrolled?

A: You would apply the deferral (postponement) for however long you choose (1 day up to 3 months), let your employees know this option has been chosen by the company (see postponement letter template on the TPR website) and then you assess at the end of the deferral period (whenever that is in January, in your example), not in between as you suggest. All you need to know on 'postponement' is in the following guidance - in Detailed guidance no.3a – Postponement at www.tpr.gov.uk/employers/detailed-guidance.aspx

Scenario - Qualifying earnings, benefits, P11d

Q: I hope you can possibly help with this one.

Qualifying earnings
A few members of friends of automatic enrolment questioned whether earnings that go through the payroll to collect class 1 National insurance only, should be included in qualifying earnings in terms of the assessment criteria.

These items could be
'Bupa, Laptop.  These items are typically added to the gross side and deducted off the deductions side of the payroll. No monies are received by the employee.
A point was raised that car allowance would be included however a company car isn't. The cash equivalent is recorded on P11D`s only, not via payroll. Should the cash equivalent of a company car be included for the assessment trigger?

I can only assume these cases may become more frequent once payrolling of benefits becomes more popular.

A: The law states that “qualifying earnings” are as follows:

  • salary/wages
  • commission,
  • bonuses,
  • overtime,
  • statutory sick pay, statutory maternity pay, ordinary statutory paternity pay, additional statutory paternity pay and statutory adoption pay,
  • or any pay element that falls into one or more of the above categories

In particular,-cash benefits-in-kind (P11D earnings), expenses and dividends paid to shareholders do not count as qualifying earnings and so would not be included in the qualifying earnings calculation.

For example, if the employer provides the worker with a company car, the cash equivalent of the car should not be included in the assessment, as the worker is not actually paid any money. The assessment of whether a component of pay constitutes an element of qualifying earnings is for the employer to make. It is a separate and distinct assessment to deciding what constitutes ‘basic pay’ for the purposes of a pension scheme that is using certification to meet minimum requirements. The employer will need to make a reasonable judgement about any other forms of remuneration – to judge whether they do or do not fall into one or more of the above categories. With a car cash allowance, the employer will need to consider why the allowance is being paid. A car cash allowance could be considered a qualifying earning if it is paid as part of the job reward package (ie if it is considered part of salary/wages) and there is no requirement to actually use the car when doing the job. Alternatively, it could be a non-qualifying earning, if it is paid to provide an essential "tool" required to do the job (eg for a mobile sales force). It is the employer's duty to make a reasonable judgement based on the reasons why the allowance is paid and it may be that and this may vary by worker.

Further information

There is no requirement to have a pension scheme which uses qualifying earnings as the definition of ‘pensionable earnings’ (ie to work out contributions for jobholders), although many employers do. So an employer could use their existing definition of pensionable earnings (if there is already a scheme in place) or it might just be easier to use total pay. The legislation sets out the minimum contribution levels depending on the earnings definition used and this information can be located in The Pensions Regulator’s Detailed Guides no 4. Pensions via the following link www.thepensionsregulator.gov.uk/doc-library/automatic-enrolment-detailed-guidance.aspx#s11500

Scenario - Qualifying earnings, pensionable earnings

Q: My company is providing two different pension schemes from different pension providers. I understand that apart from the contractual basic salary/overtime, an employer has the right to include or to exclude other gross earnings such as bonus, commission, holiday pay, PILON, statutory payment etc, as a 'pensionable pay'.  Please can you confirm?

A: The guidance states that any pension scheme can allow you to use any earnings basis and any contribution rates, provided you ensure that you are paying at least the equivalent to minimum contributions under the new legislation. You the employer can decide if you want to include bonuses, overtime, performance-related pay and other earnings related to the worker's employment. One way to do this is to use ‘self certification’ to certify that a definition of pensionable earnings, which is different from qualifying earnings, is suitable and that the scheme is a “qualifying” one. However, qualifying earnings (used for assessment and one method of defining pensionable pay) must include salary, wages, overtime, bonuses and commission, as well as most statutory payments eg statutory sick pay, maternity, paternity and adoption pay. You have to be mindful that the contributions are equivalent to the minimum required for the pensionable pay definition chosen.

Currently the minimum contribution for any workers who earn more than the qualifying earnings threshold is 2 per cent of their qualifying earnings (where the employer must contribute at least 1% of the 2%), which will rise to 8 per cent in 2019 (where the employer must contribute at least 3% of the 8%). NEST allows you to use a definition of pensionable earnings that suits your organisation. You can select qualifying earnings or one of the other pre-set alternatives from their system. You can even use your own pensionable earnings basis, as long as it satisfies the regulatory minimum.

To help employers further NEST have provided an example table on their website which shows the lower and upper levels of qualifying earnings for some commonly-used pay periods which you may find useful and I have provided a link to this information: www.nestpensions.org.uk/schemeweb/NestWeb/public/helpcentre/contents/how-do-i-calculate-contributions-if-i-m-using-qualifying-earnings.html The Pensions Regulator can help you understand the best way of working out contributions for your organisation and have a basic cost calculator on their website. I would recommend that prior to making a decision on this you review the information held on their website at thepensionsregulator.gov.uk or, alternatively seek further input from a pensions specialist as I am not able to comment on the complexities of setting up a pension arrangement.

Scenario - Re-enrolment, opt out, cease membership

Q: If you say that 'it is the employers choice' to re-enrol or not to re-enrol the employees who opted out within the prior 12 months leading up to the re-enrolment date, does the employer have any criteria that should base their decision on or it is entirely up to him?

A: It is an employer choice (as per the slides from The Pension Regulator) -you can leave them until the subsequent re-enrolment date or re-enrol everyone at the next re-enrolment date and a consideration may be whichever process is more efficient for the employer.

Scenario - State pension age, over 65

Q: We are employing a gentleman who has just reached state retirement age. He has just finished his three months probationary period and under normal circumstances would automatically enrol.  The simple questions is: is he exempt from automatic enrolment as he has reached pensionable age?

A: Yes, if this employee was postponed for three months and is now a non-eligible jobholder (because he is aged above the state pension age and under 75), then this means he does not need to be automatically enrolled. However, he is included in the automatic enrolment process, as he could choose to opt in to a pension scheme if he wished and would receive an employer contribution to their pension.

We are trying to locate an automatic enrolment opt in form. Do you know where we might be able to find one?

There is no specific form for this (although NEST do have an example on their website).

If the employer receives any request to opt in or join a pension the notice will be valid if it is:

  • • in writing (this can include being sent by email)
  • • signed by the worker submitting it or, if it was sent by email, it must include a statement from the worker confirming that they personally submitted the notice

The employer will need to assess the worker, based on their age and earnings in the pay reference period in which the date of receipt of their request falls, to determine whether they are a jobholder (where they will to need to process the request as an Opt in and enrol them into an automatic enrolment pension) - or an entitled worker (where they will need to arrange for them to join a pension, but are not required to make an employer contribution).

What happens with the qualifying earnings for assessment when an employee’s earnings spike in one month?

If you refer to paragraph 94 onwards of The Pension Regulator’s Detailed guidance no.3 – Assessing the workforce at www.tpr.gov.uk/employers/detailed-guidance.aspx - it states that you would use all of the earnings in that pay reference period for the assessment, so unfortunately this person would have to be automatic enrolled - unless you wanted to use 'postponement'. Postponement allows you to defer an assessment for various reasons eg, some or all employees at staging, new joiners or in this case when a worker becomes eligible for being automatically enrolled. There is a six week deadline to provide the employee with the postponement letter (template available on the Pensions Regulator website) in order for postponement to be valid. At the end of the chosen postponement period (1 day to 3 months can be chosen but the postponement letter must inform when is the last day of postponement), the employee must then be assessed and, if still an eligible jobholder, enrolled into an automatic enrolment pension scheme. However, If their earnings (in the pay reference period in which the end of postponement falls) have gone below the automatic enrolment trigger, then there is no need to enrol them. In this case, they must be monitored in each future pay period to check for changes in the employee’s age or earnings which may trigger automatic enrolment. Postponement may be used more than once, but you cannot apply another period of postponement whilst another is still in force. This means if someone is assessed as eligible on the last day of postponement, you cannot apply another postponement at that point, they must be automatically enrolled.

If an employee chooses to opt out, or they are assessed as an entitled worker, does the employer have to make pension contributions?

If the employee has opted out or chosen to cease membership of the pension scheme, there would be no contributions due from the employer. Similarly, there is no obligation under the automatic enrolment legislation for an employer to make a contribution if an entitled worker has chosen to join pension scheme.

If an employee was engaged on a fixed term contract would it be possible to still postpone them for three months?

Yes, the fixed term contract is not relevant to postponement. Any new starter, or anyone you have assessed who is eligible, could be postponed if the employer chooses to do so, for up to a maximum of 3 months and the communication duties must be completed within 6 weeks of the start of postponement (ie the assessment date - either their joining date or the first day of the pay reference period if they were being monitored and triggered automatic enrolment). Please note you cannot apply postponement whilst another postponement is still in force (ie if someone is assessed on the last day of postponement and is eligible, they must be automatically enrolled – postponement cannot be applied at that point).

If there is no UK employer would the employee have to be automatically enrolled?

The location of the employer is not relevant. Even if the employer is not based in the UK, or not the employees will still need to be automatically enrolled (if they are eligible), if they work or ordinarily work in the UK.

Scenario - HMRC protection, office holders, non executive directors

Q: We contractually enrol all employees into a pension scheme. We have a Non-Executive Director who was previously paid via invoice.  However, advice received following a simulated PAYE audit has resulted in him transferring onto the Company's payroll. He has been issued a contract for service letter and does not wish to be enrolled into the pension scheme as he has reached his lifetime allowance limit.

Am I correct in assuming that if he isn't enrolled into the scheme contractually then auto-enrolment rules become effective meaning that we would have to auto enrol him (and he would need to opt out)?  Or are there rules dictating that we would not need to enrol him either due to him being a non exec director or on a contract for service?

A: Firstly, just to explain one part of the question: - An employee-employer contract is a ‘contract of service’ and - A contractor-client contract is a ‘contract for services’. Under the Automatic Enrolment legislation: i. Any director who is not working under an employment contract would not be considered a worker and so would be excluded from the Automatic Enrolment legislation - their employer will have no duties for them. So, this Non Executive Director is working under a contract for services and is- they would be considered an ‘office holder’ and would not be a worker for any duties undertaken as the officeholder. However, even if the director had been working under an employment contract (a contract of service): they would be excluded if there was only one employee in the company (ie the only employee is also a director of that company); or, if they were not the only employee in the company and so they were considered a worker . ii. The Pensions Regulator now state it is ok (if you have evidence) for the employer to choose not to automatically enrol - below taken from slide 11: if an employer has 'reasonable grounds to believe' (e.g. the worker shows them documentary evidence) that a worker has HMRC tax protected status for their pension savings (e.g. Primary, Enhanced or Fixed protection), then the employer may choose not to automatically enrol/re-enrol them (The worker would still have the right to opt-in/join); or iii. For any director who is deemed to be a worker (and is subject to the automatic enrolment duties), the employer may choose not to automatically enrol/re-enrol them (the worker would still have the right to opt-in/join).

What happens when the employee turns 22-month (with a monthly pay period) - and after pay day for this month?

When a worker turns 22, the Assessment day will be their birthday. The assessment will be based on their total Qualifying Earnings (QE) paid (or contractually due to be paid) in the Pay Reference Period (PRP) in which their birthday falls. As the worker has turned 22 after payday, when running the payroll it should identify the total QE in the PRP, but if they need to be automatically enrolled a deduction cannot be taken, as it must be taken on the first payday on or after the Assessment Date (ie their 22nd birthday). The effective start date of pension scheme membership will be their birthday. So, unless their birthday falls on the first day of the PRP, the pension contribution payable may need to be pro-rated, as this first period of membership is not a full one. Please check the pension scheme rules, though (it is possible that a zero contribution may be due for the first part period of membership). If a pro-rated (i.e. non-zero) contribution is due for this first part period, then in the following month the employer will have to deduct a pension contribution for a full month plus the part period. This is in contrast to a worker turning 22 mid-month before payday, in this instance; the payroll software should assess the worker the same way (using their total QE paid in that period) and, if eligible, take the pension contribution from their pay this payday. The payment due is determined by the scheme rules, as above, and would be for the period from the assessment date (22nd Birthday) to the end of the PRP.

Scenario - Re-enrolment, choice, opt out or cease

Q: Could you kindly confirm to us whether it is the employer's discretion to re-enrol any associates who ceased membership or opted out of the pension scheme in the 12 months leading up to the re-enrolment date?

Our understanding is that employees who left the scheme prior to the 12 months have to be automatically re-enrolled, but we would like to be sure that for the ones that left later it is the employer's choice.
 

A: Yes, for cyclical re-enrolment, if they have ceased membership or opted out twelve months or less before the employer’s re-enrolment date, they do not have to be re-enrolled, but the employer may choose to do so if they wish.

Scenario - Maternity, pension contributions

Q: An employee who will be on maternity leave and receiving SMP, is currently an eligible job holder and is contributing to the pension scheme. Do the contributions continue for both employee and employer?

Also what happens to the employee and employer contributions when the employee's SMP falls below the automatic enrolment earnings trigger?  The contributions are applied after NI deductions, but prior to tax and it is a defined contribution scheme.

A: Once they have been auto enrolled they remain in the scheme unless they opt out or cease membership, even if their pay drops below the automatic enrolment trigger. The contributions for the employee who is on maternity leave will be based on the earnings what they are actually receiving (for example SMP only), but the employer contributions will be based on the employee’s pay as if she was working and earning normally - with the percentages the employee or the employer pays being based on the pension scheme rules.

Please note that, whilst there are two tax relief methods (Net Pay Arrangement and Relief At Source), pension contributions are calculated based on gross earnings, before tax and NI (if any) are applied.

If an employer has a non-contributory pension scheme and is contributing 8.5 % will this be ok and be high enough to meet the requirements for automatic enrolment?

Yes, this will meet the minimum contributions requirements that currently apply. However, there may be other criteria which would need to be met, for it to be considered a qualifying scheme. You should ask the pension scheme provider to confirm it is a ‘qualifying scheme’ and, if you are going to be automatically enrolling any staff into it, that it meets the additional criteria to be a valid ‘automatic enrolment pension scheme’. However, once the Phase III contribution rates come into force (on 6 April 2019), if the definition of pensionable pay is not based on their qualifying earnings or their total pay, the employer may need to adjust the contribution rates to ensure that minimum contribution levels are still met. For example, the minimum total contributions, for a pension scheme based on basic pay only, goes up to 9% on 6 April 2019.

Scenario - Maternity

Q: I have an employee that has been on maternity pay for four months. She is receiving the statutory amount each month. The employer has staged for auto enrolment this period. When employees are on maternity pay, they are supposed to receive all contractual benefits they would usually get.

However, I can see the auto enrolment scheme being a new benefit brought in half way through the maternity. Therefore the employee should receive the pension as she would if she were earning the full salary.

At the moment our software has calculated she should not be enrolled due to her earnings being too low.  What should I be doing in this instance?

A: If, at the date you assess this employee, their earnings were not high enough to trigger automatic enrolment (because they were only being paid statutory maternity pay), then you would simply not auto enrol them. If she had already been auto enrolled before she went on maternity leave and then her earnings dropped below the limit this would make no difference and she would remain in the auto enrolled pension scheme, with her contributions based on her actual pay (i.e. maternity and any other pay), but with the employer contributing at her pre-maternity salary level, as this would then be a pre-existing benefit.

The pension scheme’s definition of pensionable pay is not based on qualifying earnings. What should we use for assessment purposes?

The employer must always use their total (and age) when assessing their staff. The legislation defines determine qualifying earnings as salary/wages, commission, bonuses, overtime and some statutory payments (excluding expenses and dividends), as well as any pay element which is considered to be any of these. Once an employee has been enrolled, then the pension scheme rules determine the definition of pensionable pay, which may be different.

If a new 'eligible' joiner starts on 1st of the month and their first pay date is 20th of the month, should they expect their first pension deduction on their first pay day, or their second?

The first deduction would be due in the first payday on or after the date they first become eligible to be automatically enrolled. This would be from their joining date (or if postponement has been used then the first payroll on or after the last day of postponement). So, in this case, the 20th of that first month. However, if someone is being enrolled into a pension scheme in the middle of a pay reference period, then the pension scheme may or may not use pro-ration for the contributions due. For example, some pensions may require 33% of the normal full contribution if the new member joins one third of the way through that period. Those pension schemes which do not use pro-ration (or the scheme rules are silent on this issue and the employer has decided not to use pro-ration), typically do not require any contribution for the first part period of membership (in which case a full contribution would be required for anyone leaving the pension part way through a period). So, no pro-ration is being used, although the first deduction would be due on the 20th of the first month, anyone joining the scheme part way through the month would have a £0 contribution due in the first month (and a normal full contribution would be due the following month). You should check the pension scheme rules for this.

Scenario - TUPE, new company, new employer

Q: We recently converted from a Partnership Company to an LLP with all our employees TUPED across if they were employed up to the conversion date.  Our automatic enrolment scheme rules state that all our employees are to be auto enrolled after 2 months postponement. As our conversion date was the 30th September 2015, can you advise if our September starters should be enrolled in November.  We have been advised that they do not have to do this - for the new LLP we are awaiting a new staging date. But I think as it was a TUPE transfer and all the employees received notifications in September explaining they would be enrolled we should do this.

A: All transferees under TUPE are to be treated as new joiners to the acquiring company. If a company has not yet reached their staging date for whatever reason (eg being treated as a new employer), then automatic enrolment duties will not apply until their staging date. The LLP employer will not have the power to automatically enrol any staff until they reach their staging date, although the LLP could bring their staging date forward if they wish. In addition, the LLP could contractually enrol the workers who have been sent these letters if they wished (ie enrol them with the employees’ consent). However, there may be contractual benefits which would have to be explored with a specialist adviser in this area to ensure that TUPE regulations are also adhered to.

Can you give any guidance around what they should charge their clients to assist with automatic enrolment?

Unfortunately this is outside of the Advisory teams remit but did explain that charges can vary and that a tax advisor could probably provide further information relating to this. TPR have now released some evidence of cost ranges incurred for payroll and pension setup from a variety of clients but the amounts can vary significantly.

If an employee opts out of automatic enrolment, they then leave the company and re-join a few months later, does the employer have to automatic enrol them when they re-join the company?

Yes, all postponements and all history of ‘opt ins’ and’ opt outs’ should be wiped clean if a worker leaves the employer. You would need to re-assess the worker again for automatic enrolment, as this would be a new employment even if they rejoin on the same terms.

We employee a temp who is paid by us and is only here for three months. My question is, do we have to automatically enrol them?

The employer can choose whether to automatically enrol eligible jobholders on their first day of employment or they may choose to postpone the assessment for a period from one day to three months. The employer must send out a postponement letter to each employee (template letters are available on the TPR website). This may give sufficient time for the employer not to have to assess a short term worker before they leave the business, but during this time period the worker has the right to join or opt in, in which case the employer must enrol them. If they have not left on the last day of the postponement period, the employer will need to assess them and, if they are an eligible jobholder, will need to automatically enrol them.

Scenario - New rates, thresholds

Q: Do you use the old or new rates for assessing employees whose pay ref period is the 1st - 30th April with the pay date being the 5th.

Our payroll provider have stated that as the pay reference period is the 1st - 30th April and the new regs/rates don't kick in until the 6th April 2015 that the old rates should be used.  Can you please confirm that this is correct?

A: All of the thresholds (lower earnings limit, earnings trigger and upper earnings limit) that apply are based on which tax year the Assessment Date falls.

The assessment date will be:

  • The birthday of someone turning 22, or
  • The start date for someone joining the company/organisation, or
  • The last day of postponement, or
  • The first day of the pay reference period for people being monitored for eligibility.

So, this will mean for a given PRP which crosses a tax year boundary, some people will be assessed based on the previous tax year thresholds (e.g. people being monitored and people with 22nd birthdays on or before the 5th April) and some will be assessed based on the new tax year thresholds (e.g. people with 22nd birthdays on or after the 6th April and people postponed to the last day of the PRP, etc).

Scenario - Joiner, leaver

Q: I have an employee who left the company on the 28th February 2014 and during her employment and had opted out of the Auto enrolment pension.  She has since re-joined (12th January 2015) as a permanent employee.

When I have used the assessment tool from our provider, it advises me that she does not need to be reassessed until our triennial date (2017).Does this mean that once you opt out, you remain opted out until the date required?

A: Your tool is wrong or incorrectly configured. The Pensions Regulator has confirmed that if this is a new joiner (because they left and then returned under a new contract with yourselves), then they are just treated as a new worker and normal auto enrolment rules apply - so they would have to assess and, if eligible, auto enrol them under this new contract of employment.

Have staging dates been changed by the Autumn statement (in 2015)?

We can confirm that there are no change to employer’s staging date. An announcement was made by the government giving their intention to delay the phasing in of the increased contributions, but this is still subject to parliamentary approval. Once approved, this will mean the increase in the minimum total to 5% will be introduced on 6 April 2018 and the 8% will now be introduced on 6 April 2019.

Would a new governing officer, who previously was unpaid but is now paid need to be auto enrolled?

If this person has a contract of employment this would mean they are subject to the automatic enrolment law and their employer would have duties for them. However, some office holders are excluded from automatic enrolment - but they are only for the payments they receive in respect of work carried out as the officeholder. If they also have an employment contract for other work, then they would be subject to the automatic enrolment law.

Scenario - Fall in earnings

Q: I haven't got any clients that have enrolled as yet but am trying to prepare for when this eventually happens. What I require is further guidance on what happens when someone has been enrolled and then their earnings change and go below the threshold, can the employer un-enrol them or would the un-enrolment have to come as an opt out from the employee. So, is it a case of once enrolled, always enrolled, unless the employee opts out even if earning dramatically reduce.  I'm sure the answer is obvious but I can't find it anywhere.

A: Once an employee has opted in or joined a company pension scheme – and/or met the criteria for age and earnings so they are auto enrolled into a the company pension - they remain in the company pension scheme (unless they choose to opt out or cease membership) and so they would not be not ‘un-enrolled’, even if their pay drops below the earnings trigger. Depending on the choice of pensionable earnings definition this may mean they remain an active member without making a contribution in a particular pay period if/when their earnings drop below a certain level.

Scenario - Closing a scheme

Q: I have a client who is due to stage on 1st October 2015. They have an existing pension in place for four members of staff, but that pension company has written to the employer informing them of the changes to the scheme and adding an additional administration fee.

We have setup a NEST scheme for auto- enrolment and the client would like to get rid of their old scheme (for the four members of staff ,total staff 60) and auto enrol members of that scheme into the NEST scheme.  Can they do this and what would the process be?

A: The client will really need to seek advice from an Employment Law solicitor or Pensions Adviser who can provide further advice. You are likely to have to go through a process of consultation with your staff on this matter. Please accept my apologies that on this occasion I am not qualified to advise you.

Scenario - Payments after leaving, termination

Q: I hope you will be able to help me with the query related to terminated employees automatically enrolled into the pension scheme. Do the employees who have already been terminated (but have a sufficient payment after leaving) still need to contribute to automatic enrolment pension scheme?

A: This will be down the pension scheme rules - if the payment after leaving was made to the ex-employee who was auto enrolled prior to leaving and this 'additional payment' was a pensionable payment - for example an under payment of salary due to a backed dated pay rise, then the answer is probably yes it would attract contributions. If the payment was for overtime and overtime is not a pensionable element in the scheme then the answer is probably no, so you have to check the scheme administrator who will be able decide for you. Do you make final payment?

Scenario - Reaching pension age

Q: As a company we have operated a pension scheme (that is compliant) for about 12 months. One of our employees is approaching his state pension age and made the decision to end his pension and withdraw his funds. No pension contributions were made on his behalf in September. Our staging date was 1 October 2015 at which point I am obliged to auto enrol him back into the pension scheme with the provider he has just left, but as the date of his 65th birthday is 6 October 2015 do I really have to auto enrol him and then wait and see if he opts out or not?

A: If he is under state pension age (and earning enough) on the assessment date (your staging date), then he should be automatically enrolled. However, you can use postponement allows the employer to defer an assessment for a period between 1 day up to 3 months. You (the employer) need to communicate to the employee within 6 weeks from the staging date to tell him that postponement has been used.

This letter also includes information on the length of postponement and the employees’ right to opt in during this period (or any time thereafter). At the end of the postponement, the employee would be over state pension age and so would not need to be automatically enrolled.

Scenario - Tax protection, fixed, enhanced

Q: Having just read this morning’s email which clarifies that you no longer have to auto enrol someone who 'benefits from certain tax protection'.

We have a new employee, who joined the business in January and this applies to him/her so I have him postponed until 1/4/15.  Can I presume that as the new rules will apply I can just exclude him from auto enrolment?

A: You do not need to auto enrol/re-enrol workers with tax protected status employer has 'reasonable grounds' to believe their employee has tax protected status. They say that a copy of the HMRC certificate is one such way to demonstrate reasonable grounds.

There is still a requirement to tell these workers about opting in/joining, as they do have the right to opt-in or join a pension. The employer will still have the power to enrol all eligible workers regardless of whether or not those employees have tax protected status, if it is easier and more cost effective for them to do so. We know that HMRC guidance is going to be amended to ensure workers are aware of the exception and what needs to be done.

TPR have also updated their employer guidance to reflect this exception when talking about the employer duties.

We will publish further updates in NOL in due course.

What happens with regards to contributions when an employee is on SMP?

If an employee is already a member of a pension scheme and later goes on maternity leave, the employer contributions, where relevant, should be based on the employee's normal remuneration (pensionable pay), as if the employee was not absent on maternity leave (this is a requirement of employment law, not the automatic enrolment legislation). Employee contributions to a pension scheme, where they are required by the scheme rules, are based on the actual maternity pay received in the pay reference period; however, an employee can pay pension contributions at her pre-maternity leave level to receive any future benefits derived from a final salary pension scheme. Employer pension contributions are due for the complete 26-week ordinary maternity leave period, regardless of whether the employee is receiving maternity pay. Employer pension contributions do not have to continue after the end of ordinary leave for employees who do not qualify for SMP or other contractual pay. During additional maternity leave, pension contributions, unlike other non-cash benefits, can cease when paid leave expires. This is at the end of week 39 if only SMP is due; or when occupational pay ends, if this is after week 39. If the employer has passed their staging date, then they have to also comply with their automatic enrolment duties. This will include continuing to pay employer contributions for as long as the employee remains an active member of the pensions and is earning enough to be a jobholder (eligible or non-eligible). SALARY SACRIFICE - CCV must continue to be paid unless the scheme rules have been amended. When an employee is on additional unpaid maternity leave, there is no obligation for the employer to make a contribution when there is no employee contribution, that a contributory scheme is being operated (under the AE rules, the employee would be considered an Entitled Worker and so an employer contribution is not required).

Membership queries

Do I have to be a member of the CIPP to enrol/book a training course or event?

No, and students receive student membership of the CIPP for the duration of their studies.

Do I have to be qualified to become a member of CIPP?

No you do not need to have a qualification to become a member, the CIPP has different grades of membership and there is an opportunity for members to move through all grades during the course of their career.

How do I get hold of a copy of your prospectus?

A hard copy can be sent to you by emailing your address to info@cipp.org.uk or alternatively we can send a copy to you via email. The CIPP prospectus is also available on our website.

How do I update my email address and contact details?

Email membership@cipp.org.uk with your membership number and your new details.

How many times is Professional in Payroll, Pensions and Reward magazine distributed in a year?

Currently there are ten issues a year, one per month with the July / August and December / January issues combined.

I didn't receive this month's magazine, how do I get another sent out to me?

Email membership@cipp.org.uk with your membership number and state which month it is you've not received and we will look into this for you. You can also access every issue of Professional in Payroll, Pensions and Reward magazine in the members area of the website.

I haven't been receiving the News On Line: is there a problem with my email address?

It is important that you keep your details up to date so that the correct email address is being used, to verify this and to let CIPP know you are not receiving News On Line please email membership@cipp.org.uk

We are interested in joining the CIPP, can you provide me with materials and identify the easiest way I can go about the process.

A membership pack can be sent to you by emailing membership@cipp.org.uk with your address or alternatively we can send an electronic pack to you via email.

Whats the difference between the entry levels of membership: affiliate and associate

Affiliate: entry level open to anyone connected to the profession but not necessarily working in payroll, pensions or reward. Associate: entry level of membership open to experienced or qualified professionals in payroll, pensions or reward. Individuals must spend at least 50% of their time working in payroll, pensions and/or reward and meet one of the following: Evidence of one year's experience in the profession and CPD. Qualified to level three or four in payroll, pensions or reward.

Payroll Assurance Scheme

How comprehensive is PAS?

Early in the process we will provide you with a checklist which identifies 14 categories which will be assessed; within these categories there are around 60 sub-elements. These elements have been put together based on experiences gained by our consultants in payroll and taxation roles, and we believe that this creates a comprehensive review of any payroll operation, whether that be in-house or a managed payroll service. The focus of the Payroll Assurance Scheme (PAS) is to verify that processes are in place to ensure accurate payments to payees but also to ensure that appropriate deductions are made from employees pay and are accounted for to HMRC and other authorities. The assessment will also test the readiness of the employer to assimilate major legislative changes in addition to regular changes such as at tax year changes.

How much does PAS cost?

This is dependent on the number of payees processed, contact pas@cipp.org.uk for a no obligation quote. The fee is payable at the start of the process and will include: • Support from the CIPP • Assessment • Detailed assessors report • The right to use the scheme logos from the date of accreditation for a period of two years • Certificate • Plaque issued at the CIPPs annual excellence awards

How will PAS develop further?

The CIPP is committed to developing PAS to become the de facto payroll standard in the UK and to ultimately become an international standard. PAS was initially launched in 2012 and underwent a major revamp in 2015 based on the experiences of organisations who undertook the assessment and we will continue to review and fine tune based on the experiences of our customers and assessors.

Is PAS different from an internal audit?

The CIPP believes that the Payroll Assurance Scheme (PAS) approach is different from any other type of audit, or ISO type accreditation because it has been created by payroll and taxation experts and is focussed on aspects of payroll which other types of audit will not address . PAS is complementary to these audits and reports from such audits will be accepted as evidence during the PAS assessment.

Is PAS suitable for all payroll operations?

Yes. We have assessed payrolls within organisations with only one payroll employee to managed service providers with hundreds of payroll staff and large numbers of customers.

What value will the PAS logo have?

The Payroll Assurance Scheme (PAS) logo is already recognised throughout the UK payroll industry as a prestigious award and increasingly is being recognised as an indication of best practice within successful organisations. With your permission, we will promote your corporate logo on the CIPP website thereby extending recognition for your organisation. .

Why has PAS now been packaged with PQP?

The Payroll Assurance Scheme (PAS) and the Payroll Quality Partnership (PQP) have been very successful schemes in their own right, improving the payroll unction within those organisations who have engaged with them. As part of the ongoing improvements and developments to the schemes, the CIPP recognised that the two work better in conjunction with each other. The Payroll Assurance Scheme is concerned with compliance and best practice processes in operational payroll. Achievement of this scheme is essential to demonstrate compliance. The Payroll Quality Partnership then goes a step further in establishing best practice in the learning and development of the people behind the processes to ensure ongoing compliance. The value of one is lost without the other, and that is why the CIPP has packaged the two accreditations.

Payroll Technician Certificate - Online qualification

How long does this qualification take to complete?

The course is delivered over a 20 week period but is a 26 week timetabled course

How much time will I need to invest each week?

This will depend upon prior experience. Realistically you should allow about four to five hours per week. Recommended study time is seven hours per week.

How much does this qualification cost?

£1045 + VAT, which includes student membership of the CIPP for the duration of your studies. Please contact education@cipp.org.uk for multiple booking discounts.

When does this qualification start?

The course normally starts on the 1st Monday of each month. There is an intake every month apart from March

Qualifications

Can I enrol straight onto Year 2 of the Foundation Degree?

We recommend that you have worked in payroll or pensions for over two years to apply for the Foundation Degree Year two. You will have to undergo an online RPL test which will assess you on your basic pensions knowledge. Once we have received your enrolment form we will contact you regarding the RPL test.

Do I have to be a member of the CIPP to enrol/book a training course or event?

No, and students receive student membership of the CIPP for the duration of their studies.

Do I have to be qualified to become a member of CIPP?

No you do not need to have a qualification to become a member, the CIPP has different grades of membership and there is an opportunity for members to move through all grades during the course of their career.

How do I enrol?

Enrolment forms can be found on the website and will need to be downloaded and the original ink copies sent to the CIPP office.

How many hours are recommended to study for the Foundation Degree?

On average we estimate that you need to spend between 8 and 10 hours per week.

How much does each year of the Foundation Degree cost?

Visit the study pages on the CIPP website for the most up to date prices.

I am interested in sitting the National Payroll Certificates and can see that there are Learning and Revision days. Do I have to do the Revision Day before I sit the exam?

Yes, the Revision Day is a compulsory part of the National Payroll Certificates

I don't work within payroll/pensions, can I enrol on the Practitioner Certificate?

We do recommend that students work in payroll or pensions, however students can enrol if they are not currently in a payroll or pensions job.

I have previously studied the Diploma, can I enrol for the Foundation Degree?

Diploma and Foundation Degree are equivalent qualifications and you can still use MIPPDip after your name as long as you remain a fully paid member of the CIPP.

What if a prospective student only feels ready to commit to one year of introductory study?

Each year of the Foundation Degree can be regarded as a unit and commitment to study and, for that matter, finance is to one year at a time. It is accepted that some students may not wish to progress immediately from Year one to Year two.

What if I don't pass the RPL interview?

If you don't pass the RPL test you will be offered a place on Year one of the Foundation Degree.

Where will Module Review Days be held?

Indications of these can be found on the enrolment form, locations are subject to change without prior notice.

Who will my tutor be?

Tutors will be allocated to you once your course has started.

When is the cut off date for the September enrolment for the Foundation Degree?

Please email education@cipp.org.uk for information on enrolments.

When is the next intake?

Visit the study pages on the website for the next enrolment dates, or email education@cipp.org.uk.

The Payroll Quality Partnership

How much does PQP cost?

The fee payable depends on the number of payees processed and will be confirmed to you before you are asked to commit. The fee is payable prior to the start of the process and includes all assistance from CIPP, the assessment and detailed assessors report, the right to use the scheme logos in marketing and promotional material for two years and appropriate certificates and plaques.

How will PQP develop further?

Payroll Quality Partnership (PQP) has been around for eight years and during that time has been updated to reflect feedback from engaged organisations and we will continue to review and fine tune based on the experiences of our customers and assessors.

What value will the PQP logo have?

The Payroll Quality Partnership (PQP) logo is already recognised throughout the UK payroll industry as an indication of organisations committed to the development of their payroll staff. With your permission we will promote your corporate logo on the CIPP website thereby extending recognition for your organisation.

Why has PQP now been packaged with PAS?

The Payroll Assurance Scheme (PAS) and the Payroll Quality Partnership (PQP) have both been very successful as separate schemes in their own right in improving the payroll function in more than 100 organizations. At the same time it is worth acknowledging the differences between the two - in short, PAS is concerned with compliance and best practice processes in operational payroll whereas PQP is concerned with best practice in ensuring that the learning and development needs of the staff following those processes are met. They are different but they both have the same endgame – improving performance of the payroll function.

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