When is a newly-merged company a ‘new employer’ for auto enrolment?

23 May 2017


If your clients are undergoing a merger, it’s important to understand how they should be treated for the purposes of automatic enrolment.

If they merge after 1 April 2012, but both employers remain as a legal entity in their own right and remain the employer for their respective workers, their staging dates will be the same as they were before the merger.

But if a new company is created as a result of the merger, they will be treated as a new employer and will therefore have immediate automatic enrolment duties.

The employer duties and safeguards will start to apply to an employer who becomes an employer on or after 2 April 2017 and does not have a PAYE scheme, irrespective of whether they pay PAYE income or not and an employer who first pays PAYE income to any worker on or after 1 October 2017.

To get ready for the onset of the employer duties and safeguards, anyone considering employing a worker for the first time on or after 2 April 2017 should:

  • understand their duties start date
  • do an initial assessment of the worker or workers’ likely age and earnings on or before the duties start date.
  • put a pension scheme in place if the initial assessment identifies that the worker will meet the eligible jobholder criteria
  • get information ready
  • set up payroll processes and software if needed
  • decide whether to use postponement at the duties start date
  • be ready to handle opt ins if needed
  • keep records.

Read more about automatic enrolment and new employers under Section 2 of this guidance from The Pensions Regulator.