Implementation of Auto Enrolment can be postponed for up to 3 months. All workers, including those excluded from Automatic Enrolment by virtue of their age and/or earnings, can elect to opt-in at any time during the Postponement period. This would, where the Worker is an Eligible or Non-Eligible Jobholder, trigger the start of employer contributions.
It should be clear that using Postponement does not actually postpone an employer’s need to be ready for Automatic Enrolment by their Staging Date.
Postponement is a useful tool for an employer and the general recommendation is that it should be used. It can save money as it delays payment of the employer contribution but it can also reduce Administration of the scheme.
After Staging an employer will find themselves continually needing to assess staff’s eligibility to be automatically enrolled. Take for example staff that normally work fewer hours and earn under the earnings threshold. They would not be automatically enrolled. A busy period where overtime is being paid, or at the end of a financial year when bonuses are applied, a spike in earnings could occur. If postponement was not being used, that worker may need to be automatically on the basis of increased earnings in that pay period. If they did not opt-out the employer could be finding themselves paying a pension contribution for a worker when otherwise they might not need to. For businesses using a lot of seasonal staff, using Postponement is a sensible move.
Postponement can only be applied on three occasions; on the Staging Date; on a worker’s first day of employment and when a worker meets the criteria to be an Eligible Jobholder. Postponement cannot be applied to a worker who has already been automatically enrolled and is currently a member of the pension scheme.