Are you concerned about how the pensions auto-enrolment safeguards coming into force on 1 July will affect your business? From this date, safeguards aimed at protecting workers’ pensions auto-enrolment rights come into force for all employers, regardless of when their staging date is.
Here we set out four scenarios in which the employer would face sanctions for being in breach of the new pensions auto-enrolment safeguards.
1 Recruitment for opting out of pensions auto-enrolment
Sporty Clothing is concerned about the cost of pensions auto-enrolment to the business. It decides to start screening job applicants by asking certain questions at interview to ensure that it only hires staff who are likely to opt out of pensions auto-enrolment.
2 Promotion for opting out of pensions auto-enrolment
Jen and Alison are competing for a promotion at work. Jen is best suited to the role but their manager calls Alison into her office and tells Alison that, if she agrees to opt out of pensions auto-enrolment, she will receive the promotion instead of Jen.
3 Withholding pay rises to offset cost of pensions auto-enrolment
Making Food gives its workers a 2.5% pay increase each year. The company realises that if it increases Peter’s pay, he will become a jobholder for pensions auto-enrolment and have certain auto-enrolment rights. Making Food is keen to keep its pensions costs down and decides not to give Peter a pay rise this year.
4 One-off payments for opting out of pensions auto-enrolment
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Take-A-Chance is always looking for ways to save money so that it can sell its products at lower prices than its competitors. Take-A-Chance decides to save some money by offering its workers a one-off payment of £250 in exchange for opting out of pensions auto-enrolment.
Find out more about pensions auto-enrolment in Personnel Today’s employer’s guide on the topic.
