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Jun 6, 2016

Auto Enrolment - new rules for Directors

Effective from 1 April 2016, it is no longer an employer's duty to automatically enrol or re-enrol a jobholder who is a director of the company by which that jobholder is employed.

‘Already, directors who didn't have a contract of employment were outside the scope of auto enrolment. However, from 1 April 2016, it is no longer an employer's duty to automatically enrol or re-enrol a jobholder who is a director of the company by which that jobholder is employed. It will instead be discretionary and the individual will still have the same rights as any jobholder to enrol and benefit from the normal contributions.’

As it stood prior to this, director only companies are exempt where there is no contract of employment but as soon as a company employs staff, then all staff on PAYE (including owner directors) are involved in the auto enrolment process. This sensible approach has been introduced to make it discretionary, which for owners, makes perfect sense as they are likely to do their own pension arrangements anyway.

If you require clarification on this or anything to do with your auto enrolment process:

Go to www.thepensionsregulator.gov.ukor give Mike a ring!