In the last few weeks we have encountered the same question regarding auto-enrolment from several different clients. In each case the client, who is a subsidiary of a larger group, has queried when they will be required to auto-enrol employees into a qualifying pension scheme.

For those readers who have yet to look in detail at the auto-enrolment dates dictated by legislation, its worth pointing out that the principle criteria in enrolment date is the size of the employer’s workforce. The largest employers will be required to enroll employees some years earlier than the smallest. So this is actually quite a key question, as it impacts on the planning time an employer has to ‘smooth’ the cost impact of pension contributions for all.

It will probably help bring this to life if we use a simplified example.

Company A are an employer of some 100 staff, and are part of a group owned by Company B, who directly employ more than 2000 staff.

Company B having the greater number of staff would expect to enroll employees earlier (1st August 2013). Company A, if taken in isolation, have many fewer staff so would not expect to undertake enrolment until 1st June 2014. But should the two workforces be added together as they are technically part of the same group? If this were the case, then both employers would be required to enrol at the earlier date of 1st August 2013.

To get a definitive steer on this I contacted the DWP today. They have confirmed that the key criteria to decide whether a subsidiary should be included, or separate from, the overall calculation would be PAYE reference. In simple terms, if both Company A and B have a different PAYE reference they can be assumed to be separate for the purposes of auto-enrolment. If not, then the workforce numbers should be added together to provide the prospective auto-enrolment date for both groupings.

So, nice to be able to put one query to bed with relative ease. For those that need to see the auto-enrolment dates, please see the attached link to one of our technical bulletins:

https://www.jelfgroup.com/cms_files/documents/technical_bulletin_1_-_nest_staging_dates.pdf

Best regards

Steve