In part 1 of this post https://www.jelfgroup.com/blog/2011/01/another-of-those-pesky-auto-enrolment-questions-pt-1/ I dealt with employees with more than one employment and auto-enrolment, which is probably a situation that most employers will face at some time.

Part 2 expands this point a little, but is much more specific, and focuses on employers and employees who may not be commercially driven. Broadly I am referring to any employment which is more a vocation than a job. Examples of this type of employment could be charity work, or work for religious or social groupings (let’s just refer to these as ‘not for profit’ organisations for the rest of this post).

Now individuals who undertake this type of work often do so for free, in which case auto-enrolment is not an issue as there are no earnings to trigger the enrolment. However, many others receive a small level of remuneration to support the time they give to such work. Typically the levels are relatively low, and the individual will have another, much better paid, job to support normal family life.

So should such individuals be auto-enrolled by the not for profit employer? Legally, if they pass the various thresholds, then yes (see Part 1 of this post).

But is that the right decision?

Morally I suspect not. The not for profit employer now has an extra cost in terms of pension contribution. In addition, and quite possibly more significantly, the employer may now face a potentially daunting and expensive extra admin burden in complying with auto-enrolment (which for many such organisations, with fragmented payroll and HR facilities could be very difficult indeed).

Of course, one option for such employers would be to explain the cost burdens to their staff with the expectation that, given the vocational aspect of their work, that many employees would simply opt-out of a pension to save the organistion money. But this takes us back to soft-coercion again, with potential fines for the employer.

No easy answers here I feel, and certainly nothing catered for within the legislation as it stands. I will certainly flag this with the DWP on behalf of such employers, but I would not expect this to be resolved any time soon.

One final point on this sector, which arrived courtesy of NEST today, is the other extreme of this argument. Can vocational workers receive a company pension contribution (into NEST or another scheme) when they do not receive a salary? The answer appears to be yes, but this is something I will want to look into in more detail before I commit myself here.

Thanks for reading.

Best regards

Steve