Workplace pensions reform - The Pensions Regulator · for wider business support software ... It is...

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A detailed guide to...

Workplacepensionsreform for software developers to be used in conjunction with the Test data companion v3.0

Version no: 4.0 Date of issue: August 2012

Workplace pensions reform for software developers A detailed guide v4.0 2

About this guidanceThis guidance is aimed at software developers involved with payroll applications and wider business applications, for example HR and pensions administration, that may be involved in supporting an employer in complying with their new pension reforms duties. It is of particular relevance to developers with employer customers who have more than 250 persons in their PAYE scheme. This is because with the staggered introduction of the new duties employers with more than 10,000 persons in their PAYE scheme will become subject to the new duties during the current financial year. Employers with between 250 and 9,999 persons in their PAYE scheme will become subject to the new duties during the 2013-2014 financial year.

This guidance is a comprehensive guide to the key concepts in pension reform included in the ‘core’ payroll routines and wider routines supporting the end-to-end duties. It describes the employer duties using a technical notation and may not be suitable for a more general readership.

For a more general readership we have published a series of guides that cover all aspects of the new pension duties for employers. These are available at www.thepensionsregulator.gov.uk/employers/detailed-guidance.

This guide is aimed specifically at software developers

In addition we have a range of short introductory information and online tools available at www.thepensionsregulator.gov.uk/pensions-reform.

This version (v4.0) of the Software Guide has been updated as a result of feedback and to further align this guidance with the detailed guidance for employers. In addition, some changes have been made as a result of the recent changes to legislation relating to workplace pensions reform. Annex B provides details of the significant changes made to this guidance.

This guide will be updated to reflect changes to the values of the qualifying earnings thresholds and the automatic enrolment trigger point, and any other relevant legislative change. Developers can sign up to the news-by-email service on the regulator’s website to find out when the guide has been updated and published, at www.tpr.gov.uk/news.


ContentsIntroduction page 4

Using the guidance page 5

Section 1: A brief overview of the employer duties page 6 and defining the workforce 1.1 The new duties for employers page 6 1.2 The different categories of workers page 8 1.3 Postponement page 10

Section 2: Specification of ‘core’ payroll-driven calculation routines page 18 2.1 Overview page 18 2.2 Further guidance page 19 2.3 Data sources page 34 2.4 Calculation routines page 54 2.5 Report capabilities page 74 2.6 Record-keeping requirements page 80

Section 3: Specification of data/routines page 81 for wider business support software 3.1 Overview page 81 3.2 Data sources page 83 3.3 Calculation routines page 96 3.4 Report capabilities page 104 3.5 Record-keeping requirements page 105

Annex A: page 106Data driven from software systems for inclusion in information packages

Annex B: page 108Changes made between v3.1 and v4.0 of this guidance How to contact us back cover


Introduction1. This guide is designed to help software

developers update their products to support their employer customers in complying with their new pension duties in the Pensions Act 2008.

2. It is aimed at developers with any type of software product that employers may rely on to help them comply with their new pensions duties (eg payroll, HR or pensions administration software).

3. This guide pays particular attention to payroll routines because employers will need to accurately assess their workers’ earnings and make pensions contributions to comply with their duties.

4. Payroll software is expected to play a key role to enable employers to do this.

5. Discussions with software providers have indicated that payroll software is likely to support employers to comply with the core automatic enrolment duties to a large extent. However, some systems may not be able to support the full range of employer duties.

6. In its communications to employers, The Pensions Regulator (‘the regulator’) will encourage employers to seek further information from their payroll software provider about the extent their existing software will support them to comply with the duties.

7. With the staggered introduction of the new duties (see paragraphs 25 to 27 on page 7), it is crucial for software developers with products used (even on a small-scale for a subgroup of workers) by the largest employers (ie those with around 10,000 workers or more) to take immediate action based on the information in this guide. This is because these largest employers will become subject to the new legal duties across their whole workforce within the 2012-2013 financial year. Employers with between 250 and 9,999 persons in their PAYE scheme will become subject to the new duties during the 2013-2014 financial year.

Please note

This guide is not intended to be a definitive way of complying with the duties of the Pensions Act 2008. The Pensions Regulator cannot provide a definitive interpretation of the law; it can only express a view.

The guide is designed to assist business software providers in developing software to enable their customers (employers) to comply with their duties. Any alternative approach to that appearing in this guide will nevertheless need to meet the underlying legal requirements.


8. The guidance for software developers is a comprehensive guide to the key concepts in pension reform included in the ‘core’ payroll routines and wider routines supporting the end-to-end duties. It describes the employer duties using a technical notation and may not be suitable for general readership.

9. This guidance is divided into three sections. The first is an introduction to pensions reform, providing a brief summary of the new duties for an employer, the different categories of worker for whom they will have these duties, postponement and pension contributions. The second section provides guidance on the ‘core functionality’ requirements of payroll routines and the third section covers the wider end-to-end support of the duties.

10. In our view payroll software may automate core functionality which will support an employer in complying with their duties. This is covered in section 2 of the guide. This core functionality is:

• The assessment of eligibility for automatic enrolment (age, earnings and pension membership) and other worker types

• The identification of the automatic enrolment date and the enrolment date (opt in)

• The deduction of pensions contributions according to pension scheme rules

• Refunds following opt-out.

11. In section 2 the focus is on the first two bullet points above as these are less established functionality for payroll routines.

12. We have also published a test data companion to accompany this guide for software developers. The test data companion provides fourteen fictitious case studies that illustrate some of the more complex scenarios in the core functionality in section 2. This can be found on our website at www.thepensionsregulator.gov.uk/docs/test-data-companion-v3.pdf

13. In addition other business applications such as HR or pensions administration software may automate elements of the end-to-end duties

to support employers, primarily information requirements which are covered in section 3.

14. We have structured sections 2 and 3 so that they contain:

Overview – a brief summary of what is covered in each section and assumptions made.

Further guidance (section 2 only) – this outlines the assessment process and the application of the key features of the requirements that underpin the calculation routines.

Specification of calculation routines – data items listed in tabular form with technical notation supported by a brief description. There are either two or three tables of worker data items or system derived data items. The calculation routines described in each section make use of:

• Pensions reform data (section 2 only), and

• Worker data

• Data derived by the payroll (or other) system.

Reports capability – a summary of the suggested outputs from the calculation routines for an employer to progress action in order to comply with their duties.

Record-keeping – the records within the calculation routines that will support an employer in complying with the requirement to keep records for automatic enrolment.

15. In most cases the brief description in the specification of calculation routines will cover all the relevant points but in a minority of cases this guidance will refer software developers to the detailed guidance for employers for more information. In any event if developers would like further explanation of the requirements including examples and flow charts they should refer to the detailed guidance for employers.

16. The next section provides a brief summary of the new duties for employers and the different categories of workers for whom the employer has these duties. Section 2 which details the specification of data and calculation routines for the core functionality can be found at page 18.

Using the guidance


1.1 The new duties for employers

19. The new employer duties mean that an employer of a worker (see paragraph 29 for the definition of a ‘worker’) will have to:

• automatically enrol any eligible jobholder into an automatic enrolment scheme, following a prescribed process. The pension scheme must meet certain criteria and the employer will be obliged to make employer contributions to the scheme

• make arrangements to establish active membership of an automatic enrolment scheme, if a jobholder (eligible or non-eligible) chooses to opt in to a pension scheme. The pension scheme must meet certain criteria and the employer will be obliged to make employer contributions to the scheme

• make arrangements to establish active membership of a pension scheme if an entitled worker chooses to join

• provide information to their workers about how the different duties affect them

• register with the regulator to state what they have done to comply with their new duties

• process any opt outs from the pension scheme, including refunds of contributions

• ensure they do not take any action or make any omission by which the jobholder ceases to be an active member of the qualifying scheme

• ensure they do not take any action or make any omission by which the scheme ceases to be a qualifying scheme

• re-enrol any eligible jobholders who opted out or ceased active membership, after a certain amount of time (approximately every three years).

20. In addition, an employer of a worker will be able to choose to use postponement to delay automatic enrolment by a period of up to three months.

Section 1: A brief overview of the employer duties and defining the workforce17. In this section we provide a brief overview of:

• The new duties for employers – paragraphs 19 to 24

• Implementation of the new duties – paragraphs 25 to 27

• The definition of worker and the different categories of worker – paragraphs 29 to 38.

18. We also include some background information on:

• Postponement (paragraphs 39 to 58), and

• The contributions calculation including the time limits for paying contributions (paragraphs 59 to 84)

as two areas of particular relevance for software developers involved with the development of systems to support an employer in complying with their new duties under pensions reform.


21. There are also a number of safeguards in place to protect the rights of individuals to have access to pension saving under the workplace pensions reforms. The safeguards mean employers must ensure:

• they do not take any action for the sole or main purpose of inducing a jobholder to opt out of a qualifying scheme, or a worker to give up membership of a pension scheme (this is known as ‘inducement’)

• that during recruitment, they or their representative do not ask any questions or make any statements that either state or imply that an applicant’s success will depend on whether they intend to opt out of the pension scheme (this is known as ‘prohibited recruitment conduct’)

• they do not breach new employment rights for individuals not to be unfairly dismissed or suffer detriment on grounds related to the new employer duties.

22. In addition to the employer duties and safeguards, an employer must keep certain records about how they have met the duties.

23. This guidance does not cover the safeguards or the duties for an employer to:

• ensure they do not take any action or make any omission by which the jobholder ceases to be an active member of the qualifying scheme

• ensure they do not take any action or make any omission by which the scheme ceases to be a qualifying scheme

as these aspects are less suitable for expressing in software/business rules terms.

24. This guidance also does not currently cover the rules and calculations for automatic re-enrolment and re-registration with the regulator because these duties will not arise for employers before 2015 and it is anticipated that legislation will be amended to achieve minor but important technical improvements, the detail of which remains to be clarified in legislation. It is anticipated that a later version of this guide will cover automatic re-enrolment and re-registration.

25. The new employer duties will be introduced in stages, starting in 2012. Each employer will be allocated a date from when the duties will first apply to them, known as their ‘staging date’. The safeguards apply to every employer from 1 July 2012.

26. The staging date is based on the number of people in an employer’s PAYE scheme so employers with the largest numbers of workers in their PAYE scheme will have the earliest staging date. Employers with fewer people in their PAYE scheme will have later staging dates. For more information on staging see Detailed guidance no.2 – getting ready (www.thepensionsregulator.gov.uk/docs/pensions-reform-getting-ready-v4.pdf).

27. Each employer will be contacted directly in advance of their staging date by the regulator. Employers can notify the regulator to bring forward their staging date as early as July 2012 in some cases.

28. It is apparent from the list of duties in paragraph 19 that the action an employer has to take under pensions reform varies depending upon what type of worker they have – an eligible jobholder, non-eligible jobholder or entitled worker. It is key for an employer and for any developer of a business application supporting an employer customer in meeting their duties to understand the different categories of worker. The starting point for this is understanding who is a ‘worker’ for pensions reform.

Section 1: A brief overview of the employer duties and defining the workforce


1.2 The different categories of workers

29. In pensions reform, a worker is defined as any individual who:

• works under a contract of employment (an employee), or

• as a contract to perform work or services personally (ie they cannot send a substitute or sub-contract the work) and is not undertaking the work as part of their own business.

30. Anyone who has entered into a contract of this type (sometimes referred to as a ‘contract of service’) with an individual is an employer and will be required to comply with the new employer duties.

31. For some types of workers there are special rules, ie offshore workers, seafarers and members of the armed forces. For more information about the definition of a worker see Detailed guidance no.1 – Employer duties and defining the workforce (www.thepensionsregulator.gov.uk/docs/pensions-reform-employer-duties-v4.pdf).

32. The employer is responsible for ensuring that they have identified all those working for them who meet the definition of worker as workers. And they are responsible for fully discharging any duties arising in respect of that worker.

33. Once an employer has identified that they have a worker, the next step is to ascertain what type of worker they have.

34. There are two main categories of worker for which the employer duties apply:

• jobholders

• entitled workers.

35. The category of jobholder then further subdivides into two groups:

• eligible jobholders

• non-eligible jobholders.

36. The category into which a worker falls is determined by their age and whether they earn qualifying earnings. See table 1 for the criteria for each category.

37. The employer duties apply in respect of:

• eligible jobholders

• non-eligible jobholders

• entitled workers.

38. The illustration below shows how the different categories of worker relate to each other. (Note that the size of the components is not indicative.)

The different categories of worker

Workers

Entitled workers

Jobholders

Eligible jobholders

Non-eligible jobholders



Table 1: The different categories of worker

Category of worker Description of worker

Jobholder A worker who:

• is aged between 16 and 74

• is working or ordinarily works in the UK under their contract

• has qualifying earnings.

Eligible jobholder A jobholder who:

• is aged between 22 and state pension age

• has qualifying earnings above the earnings trigger for automatic enrolment.

Non-eligible jobholder A jobholder who:

• is aged between 16 and 21 or state pension age and 74

• has qualifying earnings above the earnings trigger for automatic enrolment, or


• has qualifying earnings below the earnings trigger for automatic enrolment.

Entitled worker A worker who:


• is working or ordinarily works in the UK under their contract

• does not have qualifying earnings.

NB: ‘Qualifying earnings’ is a reference to earnings of between £5,564 and £42,475 (for the 2012-2013 tax year) made up of any of the following components of pay that are due to be paid to the worker:

• salary

• wages

• commission

• bonuses

• overtime

• statutory sick pay

• statutory maternity pay

• ordinary or additional statutory paternity pay

• statutory adoption pay.



1.3 Postponement39. Postponement is an additional flexibility for

an employer that allows them to choose to postpone automatic enrolment for a period of their choice of up to three months.

40. To exercise that choice, the employer must issue the worker or workers with a postponement notice. There are three options with varying levels of information.

41. Postponement can only be used for a worker on certain dates:

• the employer’s staging date, in respect of any workers employed on their staging date

• the first day of employment, in respect of any worker starting employment after the employer’s staging date

• the date a worker employed by them meets the criteria to be an eligible jobholder after the employer’s staging date.

42. In addition, an employer can use postponement where they have applied the transitional period for defined benefit (DB) and hybrid pension schemes to a worker. For more information on the transitional period see Detailed guidance no. 3b – Transitional period for DB and hybrid pension schemes (www.thepensionsregulator.gov.uk/docs/pensions-reform-transitional-period-db-hybrid.pdf).

43. In this guidance these dates are given specific titles:

• Worker postponement – this covers postponement at an employer’s staging date, at the worker’s first day of employment or for an employer using the DB and Hybrids transitional period for a worker, and

• Eligible jobholder postponement – this covers postponement at the date that the criteria to be an eligible jobholder are met after the employer’s staging date.

44. The reason for this is that only eligible jobholder postponement can be repeated and so this needs different rules. This distinction and these terms are not used in the detailed guidance for employers.

45. An employer could use postponement to:

• smooth the process of staging, eg automatically enrol groups of workers at different points in the three month period

• align automatic enrolment with their existing payroll processes, eg to avoid calculation of contributions on part-period earnings, or to maximise the amount of the opt-out period that falls before payroll is run

• smooth the process of the automatic enrolment duty in respect of workers with rare spikes in earnings

• smooth the process of the automatic enrolment duty in respect of short-term workers who leave soon after starting work, or workers who trigger automatic enrolment just before ceasing employment

• smooth the process of fulfilling the information requirements, eg use the postponement notice to fulfil a number of the different information duties for a worker in one go.

46. Once the employer has decided that they are going to use postponement and the type of notice they are going to use the employer then needs to decide on the ‘deferral date’. (The different type of postponement notices are described in Section 3: Specification of data sources/calculation routines for wider business support on page 81.)

The deferral date

47. The deferral date is the last day of the postponement period. It is key for the employer as it is the date on which they must assess the worker and it must be included in the postponement notice.



48. The deferral date is a date of the employer’s choosing up to three months after:

• the day after the employer’s staging date, if they are choosing to use postponement on their staging date in respect of any workers employed on their staging date

• the day after the first day of employment, if they are choosing to use postponement on the first day of employment in respect of any worker starting employment after the employer’s staging date

• the day after the date the criteria to be an eligible jobholder are met, if they are choosing to use postponement on the first day a worker employed by them meets the criteria to be an eligible jobholder after the employer’s staging date.

49. The employer may choose any duration of postponement up to the maximum allowed. ‘Months’ means calendar months. For example, if the employer’s staging date is 1 October, the latest possible deferral date they can choose is 1 January.

50. In this guidance the deferral date is expressed in a different notation to that set out in the detailed guidance for employers. It corresponds to Worker postponement end + one day or eligible jobholder postponement end + one day. This is because of the use of flags to prevent action by the employer as a result of an assessment done during the postponement period and the need to remove the flag so that action can be triggered.

Choosing a deferral date

51. An employer can choose their deferral date to suit their existing processes and their reason for choosing postponement subject to it being within the three month period.

52. If, for example, an employer is using postponement to avoid part-period calculation of contributions, they should ensure the deferral date is the first day of a pay reference period.

53. If, however, they are choosing to use postponement for short-term workers who leave soon after starting work, they may wish to choose the latest possible deferral date.

54. Generally, postponement is in respect of a single worker. However, if an employer chooses to use postponement at their staging date, they can choose to use it in respect of one worker, or groups of workers, or all their workers in employment at the staging date.

55. This can be done to stagger the introduction of the employer duties over a three-month period in order to help with the administration of a large number of new joiners to a pension scheme. To do this, an employer may postpone different groups of workers for different periods of time, up to three months after the staging date.

56. Where an employer is postponing groups of workers in this way, they will need to decide on the different deferral dates for each group.

57. On some occasions, an employer may have groups of workers starting employment on the same date and on these occasions, they can use postponement for a group of workers. Again, this could be used to help with the administration of the new duties for these workers.

58. Where an employer is using postponement in respect of a group of workers, each individual worker must be provided with a postponement notice. It is not possible for one notice to cover several workers.

Contributions calculation

59. The employer will need to calculate and pay their own contributions as well as calculating, deducting and paying the jobholder’s contributions (if they are making any) to the automatic enrolment scheme. They must do this for as long as the jobholder remains in employment with that employer and is an active member of the pension scheme.


continued over...


60. The actual process of calculating and paying contributions is unchanged by any of the new employer duties. The rules or governing documentation of the pension scheme determine what contributions are due in relation to the eligible jobholder.

61. However, the new duties do introduce minimum contribution levels for a defined contributions pension scheme (often called a ‘money purchase’ pension scheme) that is being used for automatic enrolment or opt in. They also introduce a requirement for employers to deduct contributions and amend certain time limits for paying contributions over to a scheme during the joining window and opt-out period.

62. This section sets out how the data sources and the calculation routines starting on page 54 could be used to calculate contributions required of qualifying pension schemes. It does not provide comprehensive details on the overall requirements for pension schemes to be used under the duties, for more information on this please go to the workplace pensions reform Detailed guidance no.4: Pension schemes (www.thepensionsregulator.gov.uk/docs/Pensions-reform-pension-schemes-v4.pdf).

63. It is important to note that the employer is not obliged to calculate and deduct contributions according to any formula set out in the legislation. Instead, the employer is responsible for satisfying themselves that the pension scheme they intend to use meets a number of qualifying criteria, including, where relevant, a member entitlement equivalent to the minimum contribution level set out in legislation. Once the employer has examined the pension scheme and is satisfied it meets the qualifying criteria, then the contributions to be deducted and paid are determined by the rules of/agreements with the pension scheme itself.

64. As the mechanics of calculating contributions is unchanged by the new duties, the rules (or other governing documentation) of a pension scheme will, as now, specify what components of pay the pension is calculated on (‘pensionable pay), and the rate of contributions to be applied to that pensionable pay and the due date for paying those contributions.

65. This means that the pension scheme may use qualifying earnings as its definition of pay, or it may retain its existing definition of pensionable pay with no disregard of earnings (ie contributions due from the first pound of earnings). Or retain its existing definition of pensionable pay and its existing disregard of earnings (which may be different to qualifying earnings).

66. For this reason, this guide does not provide the rules for payroll systems to calculate pension contributions under the new duties. However, the remainder of this section (up to paragraph 75) does explain the minimum contribution requirement for money purchase (defined contribution) pension schemes.

67. The minimum contribution requirement is that under the scheme rules or governing documentation:

• the employer must make contributions in respect of the jobholder

• a total minimum contribution, however calculated, must be at least 8% of the jobholder’s qualifying earnings in the relevant pay reference period

• a minimum employer’s contribution, however calculated, must be at least 3% of the jobholder’s qualifying earnings in the relevant pay reference period.

68. Qualifying earnings’ is a reference to earnings of between £5,564 and £42,475 (for the 2012-2013 tax year) made up of any of the following components of pay that are due to be paid to the worker:

• salary

• wages

• commission

• bonuses

• overtime

• statutory sick pay

• statutory maternity pay

• ordinary or additional statutory paternity pay

• statutory adoption pay.


...continued: Contributions calculation


69. These contribution levels are gradually increased in three steps over the period 1 July 2012 to 1 October 2018. This is known as ‘phasing’ and is intended to help employers gradually adjust to bearing the cost of contributions. Table 2 shows the formula for calculating the minimum contributions into money-purchase schemes over the three phasing steps.

Table 2

Duration of step Employer’s staging date to 30 September 2017

1 October 2017 to 30 September 2018

1 October 2018 onwards

Minimum total contribution 2 x QE_PRP/100 5 x QE_PRP/100 8 x QE_PRP/100

Minimum employer contribution

1 x QE_PRP/100 2 x QE_PRP/100 3 x QE_PRP/100

Required member contribution where employer contribution is at minimum


NB1: QE_PRP is in C8 on page 58.

NB2: The legislation defines the minimum employer contribution and the minimum total contributions. However, if the employer wishes to pay above the minimum then the member contribution can be lower than the amounts stipulated here as long as when added together the employer and member contributions result in at least the minimum total contributions.

NB3: Tax relief should be applied as appropriate according to the method in use. This will depend upon whether the pension scheme is using relief at source or net pay arrangements.

70. With existing DC pension schemes, however, whether occupational or personal pension schemes, the definition of pensionable pay in the scheme rules is likely to be different to qualifying earnings. Pensionable pay may just include salary and not overtime or bonuses and may require contributions to be deducted from the first pound earned rather than from a band of earnings (although some existing pension schemes may also use offsets where they disregard a proportion of earnings).



71. In recognition of this, employers with schemes of this type are able to self certify that their scheme meets the minimum contributions requirement if the scheme rules (or agreements, in the case of a personal pension scheme) require contributions at one of the following levels:

• a total minimum contribution of at least 9% of pensionable pay (at least 4% of which must be the employer’s contribution) (‘tier 1’) or

• a total minimum contribution of at least 8% of pensionable pay (at least 3% of which must be the employer’s contribution) provided that pensionable pay constitutes at least 85% of earnings (the ratio of pensionable pay to earnings can be calculated as an average at scheme level) (‘tier 2’) or

• a total minimum contribution of at least 7% of earnings (at least 3% of which must be the employer’s contribution), provided that all earnings are pensionable (‘tier 3’).

This is referred to as Certification.

72. Pensionable pay (in tier 1 and tier 2) must be at least equivalent to basic pay.

73. For each of these levels the contributions are also gradually increased in three steps during phasing. Table 3 on page 15 shows the formula for calculating the minimum contributions into money-purchase schemes over the three phasing steps.



Table 3

Duration of step Employer’s staging date to 30 September 2017

1 October 2017 to 30 September 2018

1 October 2018 onwards

Tier 1






Tier 2






Tier 3






NB1: QE_PRP is in C8 on page 58.

NB2: The legislation defines the minimum employer contribution and the minimum total contributions. However, if the employer wishes to pay above the minimum then the member contribution can be lower than the amounts stipulated here as long as when added together the employer and member contributions result in at least the minimum total contributions.

NB3: Tax relief should be applied as appropriate according to the method in use. This will depend upon whether the pension scheme is using relief at source or net pay arrangements.



78. There is an additional safeguard in the law for contributions deducted from earnings:

• Any jobholder contributions that have been deducted must be paid across to the trustees or managers of the pension scheme by the 22nd day (for electronic payments) or 19th day (for cheque or cash payments) of the month after deduction.

• If the contributions were deducted in the period between the eligible jobholder’s automatic enrolment date and the end of their opt-out period or the jobholder’s enrolment date and the end of their opt-out period, they must be paid across to the scheme by the end of the second month after the month in which the automatic enrolment date fell.

79. It is important to note that in the case of occupational pension schemes, this is not the due date for the payment of contributions, but an extra safeguard for deductions from salary. The due date is the date on the relevant schedule, operated by the scheme trustees or managers, for the payment of contributions – both jobholder contributions deducted from salary and employer contributions.

80. The due dates on the relevant schedule for the payment of eligible jobholder contributions will usually be on or before the 22nd or 19th day after the month of deduction (as appropriate), to ensure that this additional safeguard in the law is always met.

81. An employer who wishes to take advantage of the extended safeguard for the deduction of contributions during the joining window and opt out period will need to discuss with their pension provider a change to the scheme’s payment schedule.

82. To use a personal pension scheme for automatic enrolment there will have to be direct payment arrangements in place. The due dates for the payment of employer contributions is whatever date is set out under these arrangements.

74. The employer must be satisfied that the scheme rules meet the requirements in paragraph 67 or in one of the DC certification tiers in order to be able to use the scheme for the new duties. The components of pay to be treated as pensionable and the contribution rates to be applied will depend upon the governing documentation of the pension scheme the employer has chosen to use.

75. Software developers should note therefore that it is the rules provided by the pension scheme that should be used to calculate pension contributions and not necessarily the formula provided in tables 2 and 3.

Time limits for paying contributions

76. The time limits for paying over contributions are amended by the new duties to allow for the opt-out period and the possibility that a worker may opt out of pension saving in this period. Software developers should note however, that as now, it will broadly be the rules (or other governing documentation) which will specify the due date for the employer to pay the contributions across, depending upon whether the pension scheme is an occupational or contract based (ie personal pensions scheme) pension scheme.

77. Trustees and managers of occupational pension schemes will operate a schedule of payments, as required by law. This schedule is usually agreed with the employer. It will set out the due dates for paying jobholder contributions (if any) and employer contributions to the scheme, and the amount of those contributions.



83. The due date for paying any jobholder’s contributions to the scheme is set out in the legislation:

• Any jobholder contributions that have been deducted must be paid across to the trustees or managers of the pension scheme by the 22nd day (for electronic payments) or 19th day (for cheque or cash payments) of the month after deduction.

• If the contributions were deducted in the period between the eligible jobholder’s automatic enrolment date and the end of their opt-out period or the jobholder’s enrolment date and the end of their opt-out period, they must be paid across to the scheme by the end of the second month after the month in which the automatic enrolment date fell.

84. The next section provides the specification of data and calculation routines for the core functionality described in paragraph 10. Section 3 on page 81 details the specification of data and calculation routines for wider functionality which may support an employer in their end-to-end duties.



Section 2: Specification of ‘core’ payroll-driven calculation routines85. In this section we cover the data sources and

calculation routines for the core functionality of:

• The assessment of eligibility for automatic enrolment (age, earnings and pension membership) and other worker types

• The identification of a workers automatic enrolment date and the enrolment date (opt in)

• The deduction of pensions contributions according to pension scheme rules

• Refunds following opt-out.

86. Section 2 is divided into six parts: 2.1 Overview 2.2 Further guidance – background information on the assessment process 2.3 Tables of data sources 2.4 Specification of calculation routines 2.5 Reports capability 2.6 Record-keeping.

87. The specification of the calculation routines starts on page 54.

2.1 Overview88. Using the data in this section, the system will be

able to calculate:

• Whether a worker has qualifying earnings in any relevant period

• Whether a worker is an eligible jobholder (and therefore must be automatically enrolled)

• Whether a worker is a non-eligible jobholder

• Whether a worker is an entitled worker

• The date automatic enrolment must be effective from and contributions deducted

• The date opt in must be effective from and contributions deducted

• Payroll-driven record-keeping requirements.

89. The calculation routines described in this section make use of:

• Pensions reform data – page 34

• Worker data – page 40

• Data derived by the payroll (or other) system – page 54.

90. In this section we assume that an automated system will carry out an assessment each time it is run. Flags are used in this guidance to indicate where an employer may not need to take any action on the output from that assessment.


91. In addition we assume that a number of necessary conditions for compliance, which are not supported by software, are continuously met under the duties. These assumptions are:

• Prior to becoming subject to the duties, employers have in place a pension scheme/pension schemes that meet the relevant ‘qualifying scheme’ criteria or ‘automatic enrolment scheme’ criteria in order to be used under the duties.

• The employer is satisfied that its chosen scheme(s) continues to meet the relevant criteria on an ongoing basis. If this is not the case then the employer will have to automatically re-enrol affected members within specified timeframes.

• The employer has identified those on the software system who are ‘workers’.

• The employer has identified the workers that meet the definition of ‘working or ordinarily working in the UK under the worker’s contract’ and it is these workers that will undergo the assessment of age and earnings in the software system. Anyone employing a worker who works, or ordinarily works, in the UK under a worker’s contract will have duties under the Pensions Act 2008.

• The worker remains an active member of the pension scheme unless an act on the worker’s part causes them to cease active membership (ie they decide to terminate membership, leave work or retire). If anything is done by the employer, pension scheme or any other third party to interrupt active membership then the employer will be obliged to automatically re-enrol the affected jobholder within specified timeframes.

92. The approach in this guidance is one way of achieving the necessary function within the system. However, there may be other ways to achieve the same function. It is for developers to decide what is appropriate within their system(s).

2.2 Further guidance93. In this part we provide some background

information on some of the key requirements of the assessment process which underpin the data and calculation routines starting on page 54. The assessment process is described between paragraphs 95 to 128.

94. Later in this part we illustrate the application of these requirements to a number of common situations we have been asked about, for example, handling errors.

The Assessment process

95. The criteria for each of three categories of workers for whom the employer principally has duties includes an assessment of earnings. The legislative requirement is that ‘qualifying earnings are payable by the employer in the relevant pay reference period’ above certain thresholds.

96. Understanding pay reference periods is key to assessing the earnings of a worker. The first day of a pay reference period will often be the date from which automatic enrolment is triggered and so it is critical that any system is using the right dates for the pay reference period.

97. There are three steps to making that assessment of earnings:

• Step A: Identify the relevant pay reference period – the period of time in which earnings are being measured.

• Step B: Identify what is payable in that period – the earnings to measure in that period of time.

• Step C: Compare what is payable with the lower level of qualifying earnings and the earnings trigger for automatic enrolment for that period – the threshold for that period of time against which to measure the identified earnings.

Section 2: Specification of ‘core’ payroll-driven calculation routines


A: Identify the relevant pay reference period

98. The first step in understanding what the relevant pay reference period is for a worker is to identify what the general pay reference period is for that worker. The pay reference period is defined in the legislation as: ‘(a) in the case of a person who is paid their regular wage or salary by reference to a period of a week, the period of one week (b) in the case of a person who is paid their regular wage or salary by reference to a period longer than a week, that period.’

99. The usual pay reference period for a worker therefore is the period of time by reference to which the employer pays the worker their regular wage or salary. The pay reference period is not the interval between the dates the worker actually receives their pay ie it is not the pay frequency although sometimes the two will coincide. For example a salaried worker who is paid by reference to the work done in a calendar month will have a monthly pay reference period and will also have a monthly pay frequency.

100. As it is not the pay frequency it is separate to PAYE and NIC so it is not the tax week or tax month. Understanding by reference to what period of time an employer is paying a worker is key to identifying pay reference periods.

101. For example, if an employer collates hours worked on a four-weekly basis and pays the worker’s wage in respect of those hours worked, their pay reference period will be four-weekly. This is the period of time by reference to which they pay their workers. It does not matter if the employer pays in arrears. It does not matter if the period of time over which they collate overtime is different. It does not matter if pay date is the same date each month. The employer is identifying the general period of time by reference to which they pay the worker’s salary or wage.

Example 1

ABC Ltd pays weekly in arrears. They collate hours worked from a Tuesday to a Monday. Jo worked 35 hours in the week from Tuesday 24 April to Monday 30 April. Her wages for this period are £350. Pay date is Friday 4 May.

Remember the employer is considering the general period of time by reference to which they pay. They do not consider the pay date for working out the general time by reference to which they pay. They only consider column 1 – the period over which hours worked are collated.

From this ABC Ltd will identify that the pay reference period for Jo is weekly, that starts on a Tuesday and ends on a Monday.

1 2

Period over which hours worked are collated

Pay date

24/4 to 30/4 4/5

1/5 to 7/5 11/5

8/5 to 14/5 18/5

102. The principle is the same for salaried workers although the employer is not collating hours. The employer needs to consider by reference to what period of time they pay the worker’s salary.

103. For example, worker A receives a fixed basic salary and is paid monthly. This is paid on the last working day of the calendar month. This payment relates to work done during the period from first of the month to the end of the month. The pay reference period for March runs from 1 March to 31 March.

104. Worker B receives a fixed basic salary and is paid monthly. This is paid on the 23rd of each month. The payment relates to work done between 24th and the 23rd day of the following month. Worker B’s March pay reference period runs from 24 February to 23 March.



w/c 1

Staging 1/10 - relevant PRP

w/c 8

new starter 24/101/10 staging date

w/c 15October 2012

w/c 22 w/c 29

New starter - relevant PRP

Staging 1/10 - relevant PRP

new starter 14/111/10 staging date

Oct 2012 Nov 2012

New starter - relevant PRP

1 2


Pay date

24/4 to 30/4 4/5

1/5 to 7/5 11/5

8/5 to 14/5 18/5

105. But the legislative requirement means that the employer must measure earnings in a specific pay reference period – the relevant pay reference period. We need to go back a step in explaining what the relevant pay reference period is.

106. The legislation requires that automatic enrolment is with effect from the automatic enrolment date. The automatic enrolment date is the first date that the criteria to be an eligible jobholder are met or if the employer is using postponement, the deferral date if on that date the criteria to be an eligible jobholder are met.

107. The legislation also requires that information about the right to join a pension scheme or to opt in to an automatic enrolment pension scheme is provided by the end of the period of one month from the date the right first applies.

108. An employer therefore has to identify the first time a worker meets the criteria to be an eligible jobholder, non-eligible jobholder or entitled worker because they have duties from this date and the deadline for completion of those duties starts from this date.

109. It is not practical for an employer to be looking every day to see the first occasion that earnings have reached a level for a certain category to be met. So the legislation covers a series of dates/events which trigger the employer to look at their worker to see what criteria are met. We group these dates together and call them ‘the assessment date’ in our guidance for employers. This includes the first day of a pay reference period because if, on an assessment date, the criteria to be an eligible jobholder is not met, the employer must look again on day one of the following pay reference period (as they need to identify the first point the criteria is met) and so on.

110. The relevant pay reference period is the pay reference period in which the assessment date falls.

The relevant pay reference period

Example of a weekly PRP, Mon-Sun

Example of a monthly PRP, first day of the month to last

111. We’ve set out the legislative requirements which underpin the assessment process above but actually when it comes to making the assessment of age and earnings in an automated system the emphasis on assessment date is slightly different simply because we assume that the calculation of age and earnings is made every pay reference period.

112. Nevertheless, where this is the case, it is important to remember that the calculation within the system is still making the assessment as at a specific date – as at the assessment date falling within the pay reference period. Commonly this will be the first day of the pay reference period (as the employer needs to identify the first point the criteria is met). In systems this means looking at the age on the assessment date and calculating the qualifying earnings payable in the pay reference period. If on the assessment date the criteria to be an eligible jobholder are met then this assessment date is also the automatic enrolment date.



Example 2

Employer A has identified that they have a calendar monthly PRP (pay reference period) that starts on the first of the month and ends on the last day of the month. Payroll is run on 25th of the month and pay date is the last working day of the month.

When payroll is run on 25 April the system will assess the earnings payable in the pay reference period and the age of the worker as at 1 April, if this is the relevant assessment date. For a new starter in the month, for example, the start of the pay reference period will not be the relevant assessment date (see below).

Here when payroll is run on 25 April it will assess the earnings payable in the pay reference period and the age of the worker as at 10 April.

PRP end(30/4)

PRP start(1/4)

payroll run date (25/4)

April 2012

assessment date (1/4) pay date (27/4)

PRP end(30/4)

PRP start(1/4)


April 2012

assessment date:start date of employment (10/4) pay date (27/4)

113. There may be more than one assessment date in a pay reference period. As a minimum, there will be an assessment date in the pay reference period in which payroll is being run of the start date of the pay reference period.

B: Identify what is payable in that period

114. Having identified the relevant pay reference period the next step for the employer is to identify whether qualifying earnings are payable in that period, or whether qualifying earnings are payable above the earnings trigger for automatic enrolment in that period.

115. The employer is considering whether qualifying earnings are payable above the lower level of qualifying earnings or the earnings trigger for automatic enrolment that apply to that relevant pay reference period. We split this into two steps below, first identifying what is ‘payable’ and then in step C whether what is payable is above the applicable thresholds.

116. The identification of the period over which earnings are being measured is a separate and distinct consideration from identifying whether qualifying earnings are payable in the relevant pay reference period once the employer has identified it.

117. The key word in identifying qualifying earnings are payable in the relevant pay reference period is ‘payable’. Payable means ‘due to be paid’ so it includes qualifying earnings actually paid in the pay reference period as well as what is due to be paid or ought to have been paid in the pay reference period.

118. ‘Payable’ does not mean ‘earned’. This is important to remember where a worker is being paid in arrears. When a worker is paid in arrears the employer considers what is due to be paid in the relevant pay reference period not what is due to be earned during that period.



Example 3

Carter is monthly paid, on 15th of the month in respect of work done between the first and the last day of the calendar month. He is paid in arrears and payroll closes on third of the month. His basic monthly salary is £650. On 30 July he was awarded a bonus of £100. On 5 August he worked some hours overtime for which he earned £50. He turns 22 on 24 August. His employer knows that this is a date on which he must assess his worker.

The first step for the employer is to identify what the pay reference periods are for Carter. The employer identifies that Carter’s pay reference periods are calendar monthly, starting on the first day of the calendar monthly and ending on the last calendar day.

The next step is to identify the relevant pay reference period. The assessment date is his 22nd birthday on 24 August so the relevant pay reference period is the one that runs 1 August to 31 August.

Next the employer must identify whether qualifying earnings are payable in the relevant pay reference period. The qualifying earnings payable in the period 1 August to 31 August are those that fall to be paid on 15 August. For the assessment of what is payable in this period it does not matter that this is in respect of work done between 1 July and 31 July. The employer is only considering what is payable in the period 1 August to 31 August.

Carter’s qualifying earnings payable in the relevant pay reference period are £750 (£650 +£100).

Relevant PRP

Sept 2012Aug 2012July 2012

payroll cut off date

pay date


pay date


22nd birthday (24/8)

pay date



pay date


pay date


pay date

Relevant PRP




pay date (money earned 1 June - 30 June)

pay date (money earned 1 July - 31 July)

pay date (money earned 1 Aug - 31 Aug)

payroll cut off date payroll cut off date

Relevant PRP



pay date


pay date



pay date



pay date


pay date


pay date

Relevant PRP








Relevant PRP



pay date


pay date



pay date



pay date


pay date


pay date

Relevant PRP










C: Compare what is payable with the lower level of qualifying earnings and the earnings trigger for automatic enrolment.

119. The final step in the assessment of earnings is to compare the qualifying earnings payable in the relevant pay reference period against the lower threshold of qualifying earnings and/or the earnings trigger for automatic enrolment applicable to that relevant pay reference period.

120. The Department for Work and Pensions has published the legislative thresholds for the 2012-2013 tax year. The thresholds for a relevant pay reference period of 1 week, 2 weeks, 4 weeks, 1 month, 3 months, 4 months, 6 months and an annual pay reference period are set out in the legislation. An employer can use table 4 where we have reproduced the legislative thresholds to look up the appropriate value. The thresholds are also set out (including the upper threshold of qualifying earnings) as part of the Pensions reform data sources A2-A4 on pages 35 to 38.

Table 4: The lower level of qualifying earnings and the earnings trigger for automatic enrolment for 2012-2013 tax year

Pay reference period Lower level of qualifying earningsThe earnings trigger for

automatic enrolment

1 week £107.00 £156.00

Fortnight £214.00 £312.00

4 weeks £428.00 £624.00

1 month £464.00 £676.00

1 quarter £1,391.00 £2,027.00

4-monthly £1,855.00 £2,702.00

Bi-annual £2,782.00 £4,053.00



121. If the relevant pay reference period is a period that is not on the list in table 4, an employer will need to derive the appropriate threshold amount. For variations of a weekly period, an employer should multiply the number of weeks in the relevant pay reference period by the appropriate weekly threshold in table 4. For example, if the relevant pay reference period is a 5 weekly period, the earnings trigger for automatic enrolment will be £780 (5 x £156).

122. For variations of a monthly period, an employer should multiply the number of months in the relevant pay reference period by the appropriate monthly threshold in table 4. For example, if the relevant pay reference period is a 2 monthly period, the earnings trigger for automatic enrolment will be £1,352 (2 x £676).

Example 4

Consider ABC Ltd and Jo again, and assume that Jo started work on 24 April and is aged between 22 and State Pension Age. ABC Ltd pay weekly in arrears collating hours worked from a Tuesday to a Monday and paying the following Friday.

In row 2 of the table the earnings are sufficient to trigger automatic enrolment. If the employer mistakenly used the tax week period as the start date of the pay reference period then automatic enrolment would be from 4 May (as this is the start of the tax week) whereas the legislation requires automatic enrolment from Tuesday 1 May. 1 May is Jo’s automatic enrolment date.


Pay date Qualifying earnings

24/4 to 30/4 4/5 £350

1/5 to 7/5 11/5 £400

8/5 to 14/5 18/5 £150

Start and end date of PRPPay date that falls

within the PRP

Qualifying earnings payable

in PRPTax week

1 Tuesday 24 April to Monday 30 April 27/4 £0* (as Jo is paid in arrears)

4 (27/4 to 3/5)

2 Tuesday 1 May to Monday 7 May 4/5 £350 5 (4/5 to 10/5)



123. It is important to get the start date of the pay reference period right as this will invariably be the assessment date and if, on the assessment date, the criteria to be an eligible jobholder is met then this assessment date is also the automatic enrolment date.

124. The automatic enrolment date is the start date for active membership, the start date of the one month joining window during which the employer must complete the automatic enrolment process and for any pay on or after this date the employer is required under the legislation to deduct contributions.



125. When an employer is using postponement, the deferral date is an assessment date.

PRP end(30/4)

PRP start(1/4)


April 2012

assessment date:deferral date (8/4) pay date (27/4)

126. As such if on the deferral date the worker meets the criteria to be an eligible jobholder then this is their automatic enrolment date.

127. Understanding the assessment process – the employer having to identify the first point the criteria for the different categories of workers are met, the start of the pay reference period, the automatic enrolment date and the requirement to assess whether qualifying earnings payable – are all critical to understanding and applying pensions reform to individual situations.

128. Here we cover some of the common situations we have been asked about.

Errors

129. The employer is required to assess whether qualifying earnings are payable in the relevant pay reference period. As discussed this means qualifying earnings actually paid in the pay reference period as well as what is due to paid or ought to have been paid in the pay reference period.

130. Where an overpayment of qualifying earnings has been made in one pay reference period and is corrected in a following pay reference period, the employer should assess what ought to have been paid in each pay reference period.

131. For example, Robin has a 2 weekly pay reference period. In the pay reference period that starts on 5 August his employer calculates his wage to be £500. His employer assesses his qualifying earnings for the pay reference period 5 August to 18 August as £500. In the next pay reference period his employer calculates his wage to be £700. However, Robin’s employer realises that an error was made in the previous pay reference period and Robin was overpaid £100. His earnings in this pay reference period 19 August to 1 September is £600. For pension reform purposes his employer reassesses the qualifying earnings for the pay reference period 5 August to 18 August as £400, and assesses the qualifying earnings for the pay reference period 19 August to 1 September as £700.

132. Similarly where an underpayment of qualifying earnings has been made in one pay reference period and is corrected in a following one, the employer should again assess what ought to have been paid in each pay reference period when assessing whether qualifying earnings are payable in each one.

133. Care should be taken to understand when an amount is payable. For example, an ‘underpayment’ may arise because an overtime sheet was missed off. If a worker’s contract states that overtime is payable at a particular point in time, then the resulting underpayment should be treated as in paragraph 132 above. If, however under the contract, overtime is simply due at the point it is processed, then there is no underpayment of qualifying earnings and the overtime is counted at the point it is payable (ie the pay reference period in which it is processed).



Backdated pay

134. The same principles described in paragraphs 129 to 133 apply to payments of backdated pay. Just as described with errors the employer is required to assess not just what is paid in the pay reference period but what ought to have been paid.

135. As with overpayments and underpayments, when handling backdated pay, care should be taken to understand when, under the worker’s contract, the backdated amount is actually payable. If the contract states that pay awards are payable at a particular point in time, then irrespective of when the payments are actually processed and paid, they should be considered at the point when they were payable. If, however under the contract, pay increases are simply due at the point they are processed/paid/agreed, then they will only need to be considered at this point.

136. For example, if under the worker’s contract, pay is reviewed every April and any increase takes effect from this date, then if the pay award is not actually processed until November’s pay reference period, what ought to have been paid in each pay reference period from April needs to be re-assessed.

Advances of pay

137. Where an advance of pay takes place purely for practical or administrative purposes rather than as a requirement under the worker’s contract, then the advanced earnings should continue to be assessed in the future pay reference periods in which they are payable rather than in the period in which, for administrative purposes only, they are paid.

138. For example where a weekly paid worker is paid an additional week’s worth of advanced pay to cover a forthcoming holiday period but this is not a contractual agreement, then the advanced earnings should be assessed as payable during the week that the worker is on holiday. In this way, an administrative arrangement for a ‘double payment’ for a low earner will not increase the likelihood of that worker earning above the threshold values and potentially falling to be automatically enrolled.

Example 5

This example uses a calendar monthly pay reference period that starts on 15th of the month.

In the example above Serena’s relevant pay reference period is the one that starts on 15 November and ends on 14 December. Her employer knows that the next step is to assess whether qualifying earnings are payable in this relevant pay reference period. The qualifying earnings payable in this period are those that fall to be paid on 20 November and 11 December.

PRP end(14/12)

PRP start(15/11)

pay date for supplementary payroll (20/11)

pay date for main payroll (11/12)

Relevant PRP

‘Non-standard’ pay reference periods

140. Some employers operate pay reference periods of a different duration to those listed in table 4 on page 24. We also understand that some employers operate pay reference periods of varying length for the same worker, for example a cycle of 4, 4, 5 (a four weekly period followed by a four weekly period followed by a five weekly period). Such an employer may have a monthly pay frequency but as discussed in paragraph 99 the pay frequency is not the basis for the pay reference period.

141. Where an employer is operating pay reference periods of varying length and paying in arrears then the amount of qualifying earnings in a pay reference period may relate to a longer period of time than the applicable threshold for that pay reference period.

Supplementary payrolls

139. If an employer runs a supplementary payroll run for the worker (that is not correcting an error) the qualifying earnings payable in this payroll must be added to the qualifying earnings in the main payroll payable in that pay reference period for assessment purposes.



142. For example, where an employer is operating a 4, 4, 5 pay reference period and they pay in arrears this will mean the amount of money that was earned in a five weekly period will be assessed in a 4 weekly pay reference period. This is not because the employer operates 4, 4, 5 pay reference periods but because it is combined with paying in arrears. An employer operating a 4, 4, 5 pay reference period and paying in the current period would have five weekly earnings being assessed in a five weekly pay reference period. This is a consequence of the fact that the employer has to assess whether qualifying earnings are payable in the relevant pay reference period.

Start and end of assessment process

143. In this guidance, we assume that an automated system will begin running the assessment of age and earnings for a worker in each pay reference period from:

• the pay reference period in which the worker’s 16th birthday falls, or

• the pay reference period in which the worker’s first day of employment falls, or

• the pay reference period in which the employer’s staging date falls.

144. And that the running of the assessment ends when the worker ceases employment or turns 75. However it is important to note that the assessment will invariably still have to be run for the pay reference period in which either of these events occur (see paragraph 147 below).

New starters

145. Where an employer is paying in arrears, then the first pay reference period the qualifying earnings will be zero. If the worker is aged between 16 and 74 then the worker will be an entitled worker. The employer will have an information duty to tell the worker about their right to join a pension scheme (assuming the employer is not using postponement). The assessment of the worker must continue on the first day of each subsequent pay reference period to identify any further information duty or if the eligible jobholder criteria are met and automatic enrolment is triggered (assuming the employer is not using postponement).

146. If the worker starts employment after payroll arrangements have closed in the pay reference period and before the end of the pay reference period the employer will have to make the assessment manually using the payroll data. This is to give the employer the maximum possible duration of the joining window (see paragraphs 167 and 168).

Employment ends/75th birthday/State Pension Age birthday

147. For pensions reform the end of employment is the ceasing of the worker’s contractual relationship with the employer and the date of ceasing employment is the date the contract ends.

148. When a worker ceases employment, then the assessment of age and earnings is not necessary for any assessment date that falls after employment end. This means that in the pay reference period in which the worker ceases employment the assessment will still invariably have to be made as the assessment date will as a minimum be the first day of the pay reference period.



Example 6

Eric is 40 years old and has qualifying earnings payable in the pay reference period above the earnings trigger for automatic enrolment. The pay reference period is calendar monthly starting on the first day of the month. Eric ceases employment on 20 April.

In the example above, pay date is 27 April but it does not matter where pay date falls, whether it is before or after employment end, the assessment of the category of worker by the system is as at the start of the pay reference period. On 1 April Eric is 40 and the assessment of qualifying earnings for the pay reference period identifies that he has qualifying earnings payable in the relevant pay reference period above the earnings trigger. Eric is an eligible jobholder. His automatic enrolment date (assuming this is the first time he has become an eligible jobholder and the employer is not using postponement) is 1 April and he should be automatically enrolled for the period 1 April to 20 April.

Example 7

Same pay reference period as Example 6. John is 21 years old. His birthday is 10 April. He has qualifying earnings payable in the pay reference period above the earnings trigger for automatic enrolment. He too leaves employment on 20 April.

John’s assessment date is his 22nd birthday. On this date he is 22 and the assessment of qualifying earnings for the pay reference period identifies that he has qualifying earnings payable in the relevant pay reference period above the earnings trigger. John is an eligible jobholder. His 22nd birthday is the automatic enrolment date (assuming this is the first time he has become an eligible jobholder and that the employer is not using postponement) and he should be automatically enrolled for the period 10 April to 20 April.

PRP end(30/4)

PRP start(1/4)

assessment date (1/4)pay date (27/4)

employment end (20/4)

Eligible jobholder

PRP end(30/4)

PRP start(1/4)

assessment date:22nd birthday (10/4)

pay date (27/4)


Eligible jobholder



Example 8

Same pay reference period as Example 6. Sarah also ceases her employment on 20 April. Sarah is 33 years old and has qualifying earnings payable in the pay reference period above the earnings trigger for automatic enrolment. She started her employment on 21 January but her employer used postponement. The deferral date is 21 April.

As the assessment date (the deferral date) is after employment has ceased there is no need to assess Sarah on that date to see what category of worker she is.

If the employer had not used postponement the assessment day would be the first day of the pay reference period, and just as with Eric in example 6, the assessment would need to have taken place.

PRP end(30/4)

PRP start(1/4)

assessment datedeferral date (21/4)

pay date (27/4)


PRP end(30/4)

PRP start(1/4)

assessment datepay date (27/4)

75th birthday (20/4)No need to assess after this point

PRP endPRP start SPA date

assessment datefor eligible jobholder

assessment datefor non- eligible jobholder

Eligible jobholder Non-eligible jobholder

149. The same principle applies when the 75th birthday is reached. Only when the assessment date is on or after the 75th birthday does assessment cease.

Note if the assessment date is before the 75th birthday then the assessment in an automated system is as normal – age as at the assessment date and an assessment of whether qualifying earnings are payable in the whole pay reference period.

150. The same principle also applies when State Pension Age (SPA) is reached for eligible jobholder assessment. Here though, if SPA date falls part way through a pay reference period then potentially the worker will be an eligible jobholder for part of the period and a non-eligible jobholder for the remainder. Earnings: £800 a month.



period for deduction

pay date 24/10*

new starter 14/10 automatic enrolment date

Oct 2012 Nov 2012

pay date 24/11**

relevant pay reference period for assessment of worker category

151. The assessment needs to be made as at both the SPA date and the start date of the pay reference period in this example to ensure that the period of eligibility is correctly identified.

152. Where SPA date falls part way through a pay reference period, for an automated system making the assessment of eligible jobholder status the assessment date is the start of the pay reference period. The system is considering the age as at the assessment date and whether qualifying earnings are payable above the earnings trigger in the whole pay reference period (£800 in the last diagram).

153. The system is also making the assessment of non-eligible jobholder status and the assessment date for this is state pension age (being the latest assessment date for non-eligible jobholder that falls in the pay reference period). The assessment is considering whether qualifying earnings are payable for the whole pay reference period (£800 in the last diagram).

Making the first deduction of contributions

154. As discussed in paragraph 124 the automatic enrolment date is important because it is the start date of active membership of the automatic enrolment scheme and because for any qualifying earnings or pensionable pay payable after this date the employer must deduct contributions from the eligible jobholder (where the employer is not paying the whole total contribution themselves).

155. In practice, the automatic enrolment date will be the same date as the assessment date, if the assessment of the worker on that date identifies that the worker is an eligible jobholder.

156. As the calculation within an automated system of whether the eligible jobholder criteria are met is still making the assessment as at the assessment date falling within the pay reference period, the assessment will identify eligible jobholder status for a worker and the automatic enrolment date for that worker at the same time.

157. As active membership must start from the automatic enrolment date contributions are due on that part of the earnings paid from the automatic enrolment date to the end of the pay reference period, and in each subsequent pay reference period.

158. As the employer is required to deduct contributions from any qualifying earnings or pensionable pay payable in a pay reference period on or after the automatic enrolment date, the result is that where the automatic enrolment date falls on or before pay date, the calculation in the payroll system is identifying that the eligible jobholder criteria is met, the automatic enrolment date and calculating the first deduction all at the same time (see below).

This example uses a calendar monthly pay reference period

* must include pension contribution deduction for 14/10 to 31/10 *** must include pension contribution deduction for 1/11 to 30/11

159. If the assessment of eligible jobholder status from payroll data is being split from the calculation of the first deduction across different business applications, developers of those applications should be mindful of the need to make an immediate deduction in the payroll system where the automatic enrolment date (as identified in the separate assessment of the payroll data) falls on or before pay date.



160. Where the automatic enrolment date falls after pay date but before the end of the pay reference period in which the assessment is being made, the result is that the first contribution payment is in respect of a period longer than a pay reference period (see below).

period for deduction

pay date 24/10

new starter 26/10 automatic enrolment date

Oct 2012 Nov 2012

pay date 24/11*

relevant pay reference period for assessment of worker category

This example uses a calendar monthly pay reference period

* must include pension contribution deduction for 26/10 to 30/11

161. In this circumstance the system does not make the assessment of eligible jobholder status and the first deduction in the same calculation routine.

162. In either case this means that for the first payment, contributions will need to be calculated on part-period earnings.

163. Employers should note that this is different to assessing the category of worker, where earnings for the whole pay reference period are assessed (see diagrams in paragraphs 158 and 160).

164. An employer may use postponement to avoid such part-period calculations.

Payroll run and pay date in different pay reference periods

165. If the calculation routines for the assessment are being run in one pay reference period but pay date falls in another pay reference period, care must be taken to ensure that the calculation routines in an automated system are considering the correct start and end dates of the pay reference period for the assessment.

Example 9

This example uses a 4 weekly PRP.

Saheed turns 22 on 18 May. His employer identifies that the relevant pay reference period is the one that starts on 29 April and ends on 26 May. The next step for his employer is to identify whether qualifying earnings are payable in the relevant pay reference period. The qualifying earnings payable in the period 29 April to 26 May are those that fall to be paid on 3 May. The calculation of the earnings that fall to be paid on 3 May is made on 26 April which is in the previous pay reference period.

An automated system making the assessment in the calculation being run on 26 April will need to consider the assessment date or dates that fall in the next pay reference period rather then the one it is being run in.

If the assessment date was the start of the pay reference period (see diagram below), then the calculation being done in the payroll that is run on 26 April is identifying that the eligible jobholder criteria is met on 29 April, the automatic enrolment date (29 April) and calculating the first deduction (as pay date is after the automatic enrolment date) all at the same time.


pay date (3/5)

relevant PRP

PRP end(28/4)

PRP start(29/4)

PRP start(1/4)

PRP end(26/5)



pay date (3/5)

relevant PRP

PRP end(28/4)

PRP start(29/4)

PRP start(1/4)

PRP end(26/5)

assessment date



Example 10

This example uses a calendar monthly pay reference period which starts on the first of the month.

When payroll is run on 25 April the system identifies that the criteria to be an eligible jobholder for worker A are met on the deferral date. The deferral date becomes Worker A’s automatic enrolment date. This is the start of the one month joining window for the employer to complete automatic enrolment. The employer has until 7 May to complete automatic enrolment. However, the employer has not identified that automatic enrolment is triggered until 25 April when running payroll and so in practice the employer has from 25 April to 7 May to complete automatic enrolment.


pay date (27/4)

PRP start(1/4)

PRP end(30/4)

assessment date:deferral (8/4)

Assessment process late in the ‘joining window’

166. The other importance of the automatic enrolment date is that it is the start of the joining window – the one month period the employer has to complete the administrative steps for automatic enrolment.

167. As the calculation within an automated system is identifying eligible jobholder status for a worker and the automatic enrolment date for that worker at the same time, this means that where the assessment date in a pay reference period is before payroll run date for that period that the employer will lose some or all of the one month joining window.

169. There is nothing that prevents the employer preparing the enrolment information and jobholder information in advance of payroll run. They will need to talk to their pension provider about the length of time the provider will need to complete their administrative steps to establish active membership. It may be in some cases where payroll run is very late in the pay reference period that the employer may wish to consider doing an earlier run of payroll.

Pay reference periods longer than one month

170. An employer with a pay reference period longer than one month but where pay is calculated within one month of the start of the pay reference period will face the same considerations as in paragraph 169 above.

171. An employer with a pay reference period longer than one month and where pay is not calculated within one month of the start of the pay reference period will need to automatically enrol all their workers not in a qualifying scheme in at the start of the pay reference period unless they are absolutely sure that the earnings trigger will never be reached. For example a worker with a salary below the lower level of qualifying earnings and with no expectation of a bonus, overtime or commission payments.

172. This means that the employer completes the administrative steps for automatic enrolment within the one month joining window. When payroll is run for the pay reference period this will confirm whether the prediction of eligible jobholder status was correct. If it is, then a deduction of contributions is made. If not, no deduction is made.

173. An employer will need to talk to their pension provider and make sure that they and the provider are able to complete the administrative steps for automatic enrolment and then unravel those steps should the payroll run confirm the worker is not an eligible jobholder.

174. An employer may also wish to consider adding to the enrolment information to explain to the worker that if the earnings trigger is not met in the pay reference period then automatic enrolment will not go ahead.

Pay reference periods of a month or less

168. Where the pay reference period is equal to or shorter than the one month joining window, the employer will need to ensure that they can complete the administrative steps for automatic enrolment within what is left of the joining window in the event that the automatic enrolment date is between the start of the pay reference period and payroll run date.



2.3 Data sources

Pensions reform dataKey‡ The use of binary flags suggests one way of achieving the necessary function within the system. However, there may be other ways to achieve the same function. It is for developers to decide what is appropriate within their system(s).

Note 1: ‘Date’ means the data is assumed to be in the format dd/mm/yyyy and is a valid date in the Gregorian calendar, although it is for individual systems to decide how dates are held internally. Some of the calculations listed below involve adding or subtracting a number of months to a particular date. Instructions for performing these calculations are provided below:

When adding months – Add the stated number of months, subtract one day and adjust the year value as necessary eg adding three months to 01/11/2011 and subtracting a day results in 31/01/2012.

When subtracting months – Subtract the required number of months, add one day and adjust the year value as necessary eg subtracting three months from 31/01/2012 and adding one day results in 01/11/2011.



Pensions reform data

Description of data Abbreviationused

Value Recommendedfield size

A1 Employer’s duty start date

Also known as the staging date. This is the date defined in regulations on which an employer becomes subject to the enrolment duties for the first time.

Employers can also elect to move their staging date forward to an earlier date In order to do this, they must have an automatic enrolment scheme available from the earlier staging date and have notified the regulator in writing (at least one calendar month in advance of the earlier staging date).

More information about bringing the staging date forward can be found on our website: www.thepensionsregulator.gov.uk/employers/bringing-staging- date-forward

Duty_start [Various] Date

A2 Qualifying earnings lower threshold

The employer duties vary depending on whether a worker has qualifying earnings (see section 1 of this guidance on page 6). Qualifying earnings are earnings above a lower threshold made up of a range of pay components specified in the legislation. The value of qualifying earnings is capped at an upper threshold.

The values here are published in an Order (a form of secondary legislation) by the Department for Work and Pensions (DWP). The Order contains the values for the pay reference periods set out in the table. These values will be reviewed annually and may be updated through a new Order.

QE_LT £xxx,xxx.xxAnnual £5,564.00

Weekly £107.00

Calendar £464.00 monthly

Fortnightly £214.00 (2 weeks)

Lunar monthly £428.00 (4 weeks)

Quarterly (3 calendar £1,391.00 months)

Four calendar £1,855.00 monthly

Biannual (6 calendar £2,782.000 months)

continued...



Pensions reform data continued...



If changes are to be made to the values, the DWP intends that the announcement will be in November each year. Any changes will be available on our website following the announcement.

If changes are made to the values they will take effect from 6 April each year. For any pay reference period which starts on or after the 6 April it will be the updated thresholds that should be applied. Where 6 April falls part way through a pay reference period the relevant consideration for determining which of the current or updated thresholds to apply is the assessment date. It is this date that the employer is considering whether the criteria for each category of worker are met (or as at this date in an automated system). If the assessment date is before 6 April the threshold to apply will be the existing threshold. If the assessment date is on or after 6 April the threshold to apply will be the updated thresholds.

NB1: If the relevant pay reference period is a period that is not on the list, the appropriate threshold amount will need to be derived. See A4 for more detail.

A3 Qualifying earnings upper threshold

Workers who earn above the upper threshold have capped qualifying earnings and still attract the duties in the same way as other workers with qualifying earnings (ie the employer must automatically enrol them if all other conditions are met). This threshold will be relevant for the calculation of contributions if the pension scheme the employer is using uses qualifying earnings as its definition of pensionable pay.

The values here are also published in the DWP Order referred to in A2. The Order contains the values for the pay reference periods set out in the table. These values will be reviewed annually and may be updated through a new Order.

QE_UT £xxx,xxx.xxAnnual £42,475.00

Weekly £817

Calendar £3,540.00 monthly

Fortnightly £1,634.00 (2 weeks)

Lunar monthly £3,268.00 (4 weeks)











NB1: If the relevant pay reference period is a period that is not on the list, the appropriate threshold amount will need to be derived. See A4 for more detail.

A4 Earnings trigger for automatic enrolment The employer must automatically enrol workers with qualifying earnings above a trigger point.

The values here are also published in the DWP Order referred to in A2. The Order contains the values for the pay references set out in the table. These values will be reviewed annually and may be updated through a new Order.

AE_trig £xxx,xxx.xxAnnual £8,105.00

Weekly £156.00

Calendar £676.00

monthly

Fortnightly £312.00

(2 weeks)

Lunar monthly £624.00 (4 weeks)




continued...








NB1: If the relevant pay reference period is a period that is not on the list, the appropriate threshold amount will need to be derived. For variations of a weekly period, multiply the number of weeks in the relevant pay reference period by the appropriate weekly threshold. For example, if the relevant pay reference period is a five weekly period, the earnings trigger for automatic enrolment will be £780 (5 x £156). For variations of a monthly period, multiply the number of months in the relevant pay reference period by the appropriate monthly threshold. For example, if the relevant pay reference period is a two monthly period, the earnings trigger for automatic enrolment will be £1,352 (2 x £676). Do not use daily rates as the threshold cannot be broken down into days.

A5 End of DB/hybrid transitional period

Where the employer has an occupational defined benefit (DB) scheme or occupational hybrid scheme, the employer is permitted to delay automatic enrolment for an initial transitional period under specified conditions. It may only be delayed for those workers who meet the conditions.

DB_phasing_end

30/09/2017 Date






The DB/hybrid transitional period is a period of five years and three months from the date that the employer duties become legislation, from 01/07/2012. This data item is only required if the employer is using the DB/Hybrid transitional period (and DB flag = Y see B8 on page 48).

NB1: An employer may choose to use postponement (see B4 on page 42) as well as the transitional period for those workers who meet the conditions for the DB/Hybrid transitional period.



Worker data

Note 1: Where an employer has multiple contracts of employment with an individual worker, the employer must consider and, where appropriate, seek advice on whether the employment relationship is of a single employment with services being performed across each of the contracts. In such circumstances, the employer should aggregate the qualifying earnings for the totality of those employment contracts and all the duties apply only once to the worker (eg automatic enrolment, opt out etc).

If an employer is of the view that each of the employment contracts with an individual is wholly separate, they must apply the duties separately in relation to each contract.

For the purposes of assessing the earnings of workers with multiple employments for the same employer, the system will need to be instructed by the employer whether to aggregate the earnings or to treat them separately. This requirement is not affected by the requirement to aggregate for the purposes of National Insurance contributions. It does not necessarily follow that where an employer must aggregate earnings for the purposes of National Insurance they will also be obliged to do so under their pensions duties.

Note 2: Throughout these data items the deferral date (the end of the postponement period) corresponds to Worker postponement + one day or eligible jobholder postponement + one day.



Worker data


Recommendedfield size

B1 Start date of employment Employment_start

Date

NB1: Where the employer entity changes for a worker as a result of a TUPE transfer, the new employer will have to undertake anew any of the pensions reform duties that arise (eg automatic enrolment, providing information) for that worker regardless of whether the previous employer had already fully discharged their pensions duties for the worker. In practical terms when applying the rules in this specification, for the purposes of pensions reform, a TUPE transfer has an effect similar to the starting of a new employment for that worker and so the rules should be applied by the new employer on that basis.

B2 Date of birth (DoB) DoB Date

B3 Active member of qualifying pension scheme status

It will be important for the system to record whether the worker is an active member of a qualifying pension scheme with that employer at any point in time. This is because if a worker is an active member of the scheme then the duties for automatic enrolment and opt in do not apply.

While the deduction of contributions may be a strong indicator of active pensions membership, it should be noted that:

• Following automatic enrolment the deduction of contributions is likely to precede the formal creation of pensions membership administratively, and

• Not all pension schemes in use may be qualifying.

If software developers choose to determine whether a worker is an active member of a qualifying pension scheme intrinsically by identifying workers who the pensions contributions are being calculated for, rather than seek external verification, they should be aware there may be instances when this indicator is inaccurate.

Memb_QPS_flag ‡

Y/N ‡

NB1: Where a worker is already an active member of a qualifying pension scheme on or before the employers duty start date, we envisage that the memb_QPS_flag will be set to Y immediately on or before this date. Where the worker ceases active membership of a QPS, this flag should revert back to N.

In these circumstances, the next time such a worker is an eligible jobholder after membership ceases the employer will have either an automatic enrolment or re-enrolment duty. Which one applies will depend on whether the worker ever met the criteria to be an eligible jobholder whilst an active member of the scheme that would have met the qualifying criteria.

continued...



Worker data continued...



If they did, and they meet the eligible jobholder criteria again after they have ceased active membership, the employer will have a re-enrolment duty.

If the worker never met the criteria to be an eligible jobholder whilst an active member of the scheme, then the first time that they do meet the criteria after membership has ceased, the employer will have an automatic enrolment duty. The employer can choose to use postponement to postpone that duty for a period of up to three months.

B3A Date qualifying pension scheme joined

If a jobholder or entitled worker is already an active member of a qualifying scheme on the assessment date, then many of the new duties do not apply.

This data item records the date active membership of a QPS started primarily for those workers who are active members immediately before the employer’s staging date. It may also be used to record active membership as a result of automatic enrolment or opt in.

We assume that where one or more pension scheme records are held for a worker, the system will already hold information about the effective dates (start and end dates) for that scheme. Therefore Memb_QPS_date will be the date that the worker first joined the existing qualifying pension scheme or where this date is not present a default date of [Duty_start – one day] can be applied.

Memb_QPS_date ‡

Date ‡

B4 Worker subject to postponement period flag

The employer is permitted to select a period of up to three calendar months following staging, the start of a worker’s employment or the employer’s first enrolment date (for a worker for whom the employer is using the DB/Hybrid transitional period), before considering whether automatic enrolment is due.

Throughout these routines we assume the consideration of automatic enrolment is run every pay reference period. This flag would be set by the user to identify workers who the employer will use this postponement period for. This is because they can be excluded from automatic enrolment for the duration of the period, even if all other necessary conditions are met.

Wor_postpone_flag ‡

Y/N ‡






The worker postponement period may only be applied at:

• the employer’s staging date for any worker in employment on the staging date, or

• the worker’s first day of employment for any worker starting employment after the staging date, or

• the day after the day with effect from which arrangements fall to be made under the transitional period for DB and hybrid pension schemes. This is only applicable if the employer has applied the transitional period for DB and hybrid schemes to the worker (see B8 on page 48).

On the day after the expiry of the postponement period (this corresponds to the ‘deferral date’), the employer must automatically enrol the worker, providing the worker still meets the age and earnings criteria.

If the worker is not an eligible jobholder on the day after the expiry of a postponement period, they will not need to be automatically enrolled. The employer must continue to monitor their status on an ongoing basis. At the point when the worker next becomes an eligible jobholder the employer can choose to use an eligible jobholder postponement period (see B6 on page 45).

If they wish to use the worker postponement period, the employer is required to provide the worker with a notice explaining this to them within a specified deadline.

Further information on the content of the notice, the deadline for providing it and how the notice may affect wider information duties is provided in section 3 of this guide and in the workplace pensions reform Detailed guidance no. 3a – Postponement. Developers referring to Detailed guidance no3. – Postponement should note that worker postponement is a term only used in the software guidance where there is a need to separate out 3 of the four dates that postponement can be used at as there are different rules for these three dates.

If the employer wishes to choose from the full range of options for the postponement period notice (which in turn affects future information giving duties) in practice the system will need to make an assessment of eligibility at staging or when a worker starts employment.

continued...






Worker postponement can be used in respect of one worker, all workers or a group of workers. If using for a group of workers or all workers the employer must still send an individual notice to each worker they intend to postpone.

Where the employer intends to use the postponement period for all workers, it may be that the employer would require this flag to default to Y. And default the length of the period (up to the maximum of three months) to the duration the employer desires.

The status of the Wor_postpone_flag should be reverted to N with effect from Wor_postpone_end (see B5 below).

NB1: It is possible for a worker to have worker postponement at the employer’s staging date (where the staging date is not the employer’s first automatic enrolment date), then become subject to the DB phasing period and then have postponement at the end of the DB phasing period.

B5 End-date for Wor_postpone_flag

Where the Wor_postpone_flag has been set to Y, it will be important for the system to know when a worker’s postponement period ends as, if all other necessary conditions are met, the worker would fall to be automatically enrolled with effect from the following day (this corresponds to the deferral date). The deferral date will be the automatic enrolment date where the postponement period has been used and the eligible jobholder criteria are met on this date.

In order to ensure the employer does not apply a postponement period longer than the permitted period of three calendar months, the system should validate Wor_postpone_end as follows:

Wor_postpone_end must be ≤ the later of [Duty_start + three calendar months] OR [Employment_start + three calendar months] OR [DB phasing end + 1 day + 3 calendar months]

If the system sets the Wor_postpone_flag to Y by default then Wor_postpone_end may need to be calculated by a user-determined rule rather than an input date (eg the employer could stipulate that the postponement period should end on the final day of the second future pay reference period).

The status of the Wor_postpone_flag should be reverted to N with effect from the day following Wor_postpone_end.

Wor_postpone_end ‡

Date ‡






If, on the day after the expiry of the worker postponement period (this corresponds to the deferral date), the worker meets all the criteria to be an eligible jobholder, the employer must automatically enrol them with immediate effect, they can not use a further postponement period of either type.

NB1: The postponement period can be used by the employer to ensure all instances of automatic enrolment take place with effect from the start of a pay reference period, avoiding the need to calculate part-period contributions on a pro-rata basis. If they wish to do this, the employer may need to set up a rule to instruct the system to define the end-date for the postponement period to be the last day of a subsequent pay reference period so that automatic enrolment would take effect from the start-date of the next whole period.

NB2: The postponement period can also be used by employers to avoid the automatic enrolment date falling close to the end of the tax year, which could result in opt outs and refunds of contributions made in the following tax year. To achieve this, the employer-user would need to select an end-date for the postponement period to prevent the opt-out period spanning across the tax year boundary.

B6 Eligible jobholder to be subject to postponement period flag

The employer is permitted to select a period of up to three calendar months following the point when the worker meets the age and earnings criteria to be eligible for automatic enrolment (ie when they become an ‘eligible’ jobholder, see C11 on page 59) before considering whether automatic enrolment is due.

Throughout these routines we assume the consideration of automatic enrolment is run every pay reference period. This flag would be set by the user to identify workers who the employer will use this postponement period for. This is because they can be excluded from automatic enrolment for the duration of the period, even if all other necessary conditions are met.

The eligible jobholder postponement period may only be applied at: the date the worker meets the criteria to be an eligible jobholder.

On the day after the expiry of the postponement period (this corresponds to the ‘deferral date’), the employer must automatically enrol the worker, providing the worker still meets the age and earnings criteria.

EJ_postpone_flag ‡

Y/N ‡

continued...






If the worker is not an eligible jobholder on the day after the expiry of a postponement period, they will not need to be automatically enrolled. The employer must continue to monitor their status on an ongoing basis. At the point when the worker next becomes an eligible jobholder the employer can choose to use an eligible jobholder postponement period (see C11A on page 60). At the point when the worker next becomes an eligible jobholder (EJ_ repeat_date), the employer can choose to use a further eligible jobholder postponement period (see C11A on page 60).

This pattern can be repeated. In other words, providing the worker is not an eligible jobholder on the day after the expiry of a postponement period, another eligible jobholder postponement period can be applied at the point when they next become an eligible jobholder (see C11A on page 60). The potential repetition of the postponement period suggests that the eligible jobholder postponement period flag will need to be date-stamped.

If they wish to use the eligible jobholder postponement period, the employer is required to provide the worker with a notice explaining this to them within a specified deadline.

Further information on the content of the notice, the deadline for providing it and how the notice may affect wider information duties is provided in section 3 of this guide and in the workplace pensions reform Detailed guidance no. 3a – Postponement. Developers referring to Detailed guidance no3a. – Postponement should note that eligible jobholder postponement is a term only used in the software guidance where there is a need to separate out one of the dates that postponement can be used at as there are different rules on this one date.

The employer may not use the eligible jobholder postponement period while the worker is already subject to the worker postponement period (ie where Wor_postpone_flag is Y). Equally the employer may not use an eligible jobholder postponement period immediately following the worker postponement period.






This flag would be set by the user to identify eligible jobholders for whom the employer wishes to use the eligible jobholder postponement period, so they can be excluded from automatic enrolment. As the worker would otherwise fall to be automatically enrolled and have contributions deducted in the same period that the system first identifies they are an eligible jobholder, this flag will either need to be:

• Set up to turn to Y automatically if/when the worker becomes an eligible jobholder for the first time if the employer intends to use the postponement period or

• Set by a user at the point when payroll is run before net pay and deductions for that worker can be calculated.

The status of the EJ_postpone_flag should be reverted to N with effect from EJ_postpone_end (see B7 below).

NB1: The postponement period can be used by the employer to ensure all instances of automatic enrolment take place with effect from the start of a pay reference period, avoiding the need to calculate part-period contributions on a pro-rata basis. If they wish to do this, the employer may need to set up a rule to instruct the system to define the end-date for the postponement period to be the last day of a subsequent pay reference period so that automatic enrolment would take effect from the start-date of the next whole period.

NB2: The postponement period can also be used by employers to avoid the automatic enrolment date falling close to the end of the tax year, which could result in opt outs and refunds of contributions made in the following tax year. To achieve this, the employer-user would need to select an end-date for the postponement period to prevent the opt-out period spanning across the tax year boundary.

NB3: It is not possible for a worker to be subject to the worker postponement period and the eligible jobholder postponement period at the same time. This means that wherever Wor_postpone_flag = Y, EJ_postpone_flag must NOT be Y.

B7 End-date for EJ_postpone_flag

Where the EJ_postpone_flag has been set to Y, it will be important for the system to know when the eligible jobholder postponement period ends as, if all other necessary conditions are met, the worker would fall to be automatically enrolled with effect from the following day (this corresponds to the deferral date). The deferral date may be used to determine the automatic enrolment date where the postponement period has been used and the eligible jobholder criteria are met on this date.

EJ_postpone_end ‡

Date ‡

continued...






To ensure the employer does not apply an eligible jobholder postponement period longer than the permitted period of three calendar months, the system should validate EJ_postpone_end as follows:

EJ_postpone_end must be ≤ EITHER [EJ_date + three calendar months] OR [latest instance of EJ_repeat_date + three calendar months]

If the EJ_postpone_flag has been turned to Y automatically (see B6 above) then, unless there is additional user-input at that point, EJ_postpone_end will need to be set by a user-determined rule rather than an input date (eg the employer could stipulate that the eligible jobholder postponement period should end on the final day of the second future pay reference period). The status of the EJ_postpone_flag should be reverted to N with effect from the day following EJ_postpone_end.

If, on the day after the expiry of the eligible jobholder postponement period (this corresponds to the deferral date), the worker meets all the criteria to be an eligible jobholder, the employer must automatically enrol them with immediate effect, they can not use a further postponement period of either type.

NB1: The postponement period can be used by the employer to ensure all instances of automatic enrolment take place with effect from the start of a pay reference period, avoiding the need to calculate part-period contributions on a pro-rata basis. If they wish to do this, the employer would need to set up a rule to instruct the system to define the end-date for the postponement period to be the last day of a subsequent pay reference period. This is so automatic enrolment would take effect from the start-date of the next whole period.

NB2: The postponement period can also be used by employers to avoid the automatic enrolment date falling close to the end of the tax year, which could result in opt outs and refunds of contributions made in the following tax year. To achieve this, the employer user would need to select an end-date for the postponement period to prevent the opt-out period spanning across the tax year boundary.

B8 DB/hybrid transitional period applies to worker

When they first become subject to the duties, an employer with a qualifying DB scheme or qualifying hybrid scheme may delay automatic enrolment for workers that meet specified conditions until the end of a transitional period, even if they would otherwise fall to be automatically enrolled.

DB_flag ‡ Y/N ‡






The conditions that the worker must meet are that:

A. They are an eligible jobholder on the employer’s first enrolment date

B. That they have been employed by the employer for a continuous period before the first enrolment date

C. Prior to the employer’s first enrolment date for any worker, the worker is able to join a qualifying DB/hybrid pension scheme if they choose to do so

D. The DB/Hybrid pension scheme or schemes to which the worker is able to join remain a qualifying scheme for the remainder of the transitional period.

If they wish to use the DB/hybrid transitional period, the employer must provide the worker with a notice explaining this to them within one month of the employer’s first automatic enrolment date.

As the status of this flag relies on the worker’s ability to join a DB/hybrid pension scheme and the employer’s commitment to eventually automatically enrol them into such a scheme, it is expected this would be a user-determined flag and is likely to be set manually.

If the conditions in C and D above continue to be met, on expiry of the transitional period, the worker, providing they meet the necessary criteria for automatic enrolment, must be automatically enrolled into an automatic enrolment pension scheme or the employer can choose to use postponement for a period of up to three calendar months.

Following the end of the DB/hybrid transitional period (DB_phasing_end + one day (see A5 on page 38) this flag must be set to N for all workers. This is so they fall to be treated as eligible jobholders where all the other necessary conditions are met and are then automatically enrolled or become subject to a worker postponement period.

continued...






NB1: The employer’s first enrolment date is the first day on which any of the employer’s workers meet the eligible jobholder criteria. This is likely to be their staging date but may be later. For this reason where the employer is using worker postponement at their staging date and intend also to use the DB/Hybrid transitional period, in practice the system will need to make an assessment of eligibility at every pay reference period during the postponement period.

NB2: If the conditions in C and D above stop applying during the transitional period, so the worker ceases to be entitled to join a qualifying DB/hybrid pension scheme during the transitional period or the DB/Hybrid scheme stops being a qualifying scheme during the transitional period, DB_flag changes from Y to N before DB_phasing_end. The employer will need to take corrective action as the duty to automatically enrol will apply for the date that the conditions no longer apply. The detailed arrangements that an employer must follow are not detailed here as these are considered to be exceptional circumstances (for more information please see the workplace pension reforms Detailed guidance no. 3b – Transitional period for DB and hybrid schemes). It may be appropriate for the system to produce a warning message when DB_flag changes from Y to N before DB_phasing_end.

B9 Intentionally blank

B10 Date valid opt-out notice given to employer

Following automatic enrolment or opt in, a jobholder is able to opt out within a specified period. The legislation sets out criteria for an opt-out notice to be valid and it is for the employer to assess the validity of the notice. Following opt out, all contributions must cease and the employer is obliged to refund to the jobholder the full value of any pensions contributions deducted since the latest instance of automatic enrolment or opt in (adjusted for PAYE if necessary).

It is important for the system to understand when the opt-out notice was given to the employer. This is because the date is used to determine the deadline by which the refund must be made (defined at C17 on page 69) and also whether a worker should be automatically re-enrolled*.

OptOut_date Date

NB1: In this guide the term ‘opt out’ specifically refers to the case where a worker decides to opt out of a pension scheme under the new duties. They can only opt out following automatic enrolment or opt in during the opt-out period. When someone opts out, they are treated as never being a member of the pension scheme and all contributions must be refunded by law. Once the opt-out period has expired, a worker is still able to choose to cease active membership and stop contributing to their pension scheme. This may or may not result in the refunding of contributions depending on the pension scheme rules and the duration of pension scheme membership.

* The rules and calculations relating to automatic re-enrolment are not covered in this version of the guide (for an explanation see page 7). However this data item is covered here because it will be important for a system to be capable of recording this data at least one year in advance of an employer’s automatic re-enrolment duty.






NB2: A jobholder is only able to opt out and receive a contributions refund under the employer duties during the opt-out period. The start and end dates of the opt-out period are defined at E3 and E4 on page 98. As the exact start and end dates for the opt-out period are determined by reference to the later of provision of information to the worker and the pension scheme, user input is likely to be needed if the payroll system is to fully validate that OptOut_date falls within the opt-out period. If developers wish to undertake partial validation without external input, the latest possible end date for the opt-out period by law is [one calendar month plus six weeks] from [the latest instance of Cont_date]. However, if the employer completes the administrative steps of automatic enrolment very quickly, the earliest possible end date of the opt-out period is one calendar month from [the latest instance of Cont_date] so developers should be aware that this is only an approximate validation.

NB3: Following opt out or the termination of active membership (see B11 below), the employer is not obliged to continue to make employer pension contributions for the worker concerned.

B11 Date qualifying pension scheme active membership voluntarily terminated by worker

It will be important for the system to record when a worker chooses to stop contributing to their pension scheme after the opt-out period has expired. This is because the employer is not required to automatically re-enrol jobholders who have chosen to stop contributing to a qualifying pension scheme within 12 months prior to the re-enrolment date*.

When a worker voluntarily stops contributing (after the opt-out period has expired) there are no new requirements for when the contributions must cease. The payroll system should respond to an instruction to stop.

End_pension_date

Date [Not a mandatory field – may be present or not]

B12 Date active membership of a pension scheme to be started following worker joining notice

A worker who is not an eligible or non-eligible jobholder has the right to ask to join a pension scheme. After receiving this request, the employer is obliged to put the worker into a scheme that attracts tax relief and make deductions from pay (for a personal pension). There are no further scheme requirements about minimum member or employer contributions.

The employer must keep records of the notice itself, the date active membership of a scheme was achieved, and earnings and pensions contributions from that date. It is important for the payroll system to record this date in order to commence the deduction of contributions, according to the rules of the employer’s chosen pension scheme. If the scheme is a qualifying scheme then a value in B3A may be added instead or in addition.

Worker_join_date

Date

* The rules and calculations relating to automatic re-enrolment are not covered in this version of the guide (for an explanation see page 7). However this data item is covered here because it will be important for a system to be capable of recording this data at least one year in advance of an employer’s automatic re-enrolment duty.

continued...






B13-14

Intentionally blank

B15 Pension scheme rules to be applied to worker

In order for the payroll system to be able to deduct the correct pensions contributions with immediate effect from the automatic enrolment date, the employer will need to have allocated a qualifying pension scheme to each worker in advance and informed the payroll system of the associated contribution rules to apply to the worker in the event that they are automatically enrolled.

N/A N/A

B16 End date of employment

This is the date on which a worker ceases to be employed under a worker’s contract with the employer ie it is the last day of the contractual relationship. Once this date has passed, ie the day after employment_end, the employer will no longer have any new duties in respect of the worker.

In practical terms this means that automatic enrolment should only take place if the assessment date for the worker is prior to or on the last day of their employment. It will not be necessary to assess the worker in pay reference periods which start after the last day of employment.

Employment_end

Date

B17 Date valid pension notice received

Any worker (aged 16 or more and less than 75) under the new legislation can ask their employer to be made an active member of a pension scheme. Workers with an eligible jobholder or non-eligible jobholder status (see C10 on page 58 and C12 on page 60), who are not already members of a qualifying pension scheme with that employer regardless of whether they are subject to a postponement period, are permitted to give notice to the employer that they wish to opt in to a qualifying pension scheme. A worker who has an entitled worker status has the right to join a pension scheme.

Following receipt of a valid notice, the employer needs to determine whether the worker is a jobholder and the notice is therefore an ‘opt-in notice’ or whether the worker is an entitled worker and the notice is a therefore a ‘joining notice’. This is key as it determines the action the employer needs to take. Even if the worker has completed a standard opt-in or joining notice or indicated that it is one or the other the employer should validate that it is the correct notice.

Pension_notice_date ‡

Date ‡






The employer should check the worker’s status at the point in time they received the notice. If on this assessment date, the worker is a jobholder (eligible or non-eligible jobholder) and that they are not already an active member of a qualifying pension scheme with that employer, they must be put into an automatic enrolment pension scheme using the automatic enrolment process with effect from the opt-in enrolment date (see C15 on page 65). This is because the employer has identified that they have received an ‘opt-in notice.’

If on the date they receive the notice, the worker has an entitled worker status, they must be made an active member of a pension scheme. This is because the employer has identified that they have received a ‘joining notice’. The employer is obliged to put the entitled worker into a scheme that attracts tax relief and make deductions from pay (for a personal pension scheme). The pension scheme is not required to be a qualifying pension scheme. There are no further scheme requirements about minimum member or employer contributions.

The employer is not obliged to respond to more than one opt-in notice or joining notice in a rolling 12-month period from any single jobholder but may do so, if they wish. The rolling 12 month period starts from the date of an opt-in or joining notice.

For example, if a worker gives an opt-in notice on 1 January 2013, is enrolled into a scheme, then ceases membership but gives another opt-in notice in the period up to 31 December 2013 then the employer does not have to arrange active membership following receipt of the second opt-in notice. If the worker gives an opt-in notice on 1 January 2014 then they must enrol them. This is the start of the next 12 month period.

If a worker is automatically enrolled on 1 January 2013, ceases membership and gives the employer an opt-in notice on 1 April, the employer must enrol them. The rolling 12 month period starts from 1 April which is the date of the receipt of the opt-in notice.

Where the employer wishes to limit opt in or joining, in this way, the system would need to be configured accordingly.

The employer must keep records of the notice itself, the date active membership of a scheme was achieved, and earnings and pensions contributions from that date.



2.4 Calculation routines

Note 1: Developers should take particular note of NB2 and NB3 in C12 and C13 which highlight a scenario where the routines described will return an anomalous result.

Note 2: Throughout these routines the deferral date (the end of the postponement period) corresponds to Worker postponement + one day or eligible jobholder postponement + one day.



System derived data



C1 22nd birthday

This is the date the worker becomes 22 years of age.

22_date Date

C2 State Pension Age date

This is the date the worker reaches their state pension age. Payroll systems are likely to already use a worker’s state pension age to determine whether the worker is still liable for Class 1 National Insurance contributions.

A table summarising the changes to State Pension Age can be found on the Department for Work and Pensions website: www.dwp.gov.uk/docs/spa-timetable.pdf

SPA_date Date

C3 16th birthday


16_date Date

C4 75th birthday


75_date Date

C5 Start date of the Pay Reference Period

The period an employer must use to assess their worker’s earnings is the pay reference period.

A worker’s pay reference period is:

• one week, in the case of a worker who is paid their regular wage or salary by reference to a period of a week, or

• in the case of a worker who is paid their regular wage or salary by reference to a period longer than a week, whichever period the worker is paid by reference to. For example, for a person paid by reference to a monthly period, the pay reference period will be one month.

The pay reference period is not the interval between the dates the worker actually receives their pay. Understanding by reference to what period of time an employer is paying a worker is key to identifying pay reference periods.

PRP_start Date

continued...



System derived data continued...



An employer should consider in respect of which period of time their payroll operates. For example, if they collate hours worked on a four-weekly basis and pay in respect of those hours worked every four weeks, their pay reference period will be four-weekly. It does not matter if the employer pays in arrears. The employer is identifying the general period of time by reference to which they pay. See paragraphs 98 to 113 in the further guidance part of this section on pages 20 to 22 for more background on pay reference periods.

We envisage that the user will be required to carry out initial set up of the system to pre-determine the current pay reference period and future pay reference periods. Developers may be able to derive the next instances of PRP_start and PRP_end for the forthcoming tax year after that.

Developers and users will need to have an accurate understanding of pay reference periods as this is not based on the same concept as tax periods and therefore must not be mis-interpreted. If a system does not recognise the start and end dates of each pay reference period, it will be important for the employer to understand this, so they can make sure alternative arrangements are in place to remain compliant.

NB1: Where an employer pays their workers in arrears and the payroll calculation happens to be performed before the start of the pay reference period in which the calculated earnings become payable, care should be taken to ensure that the system identifies the correct values for PRP_start and PRP_end (see C6 below) for the purpose of the calculations at C7-9 on pages 57-58, C11 on page 59 and C17 on page 69.

NB2: The employer has one month from the automatic enrolment date in which to complete the administrative steps of automatic enrolment. Where pay reference periods are longer than a month for example 5 weekly or quarterly, manual intervention by the employer will be required with the system validating the assumptions made by the employer and taking a deduction (see paragraphs 167 to 175 in the further guidance part of this section on page 33 and E1 on page 96).

C6 End date of the Pay Reference Period

(see C5 above)

PRP_end Date






C7 Total earnings payable in Pay Reference Period

To be calculated by summing the earnings components payable between PRP_start and PRP_end inclusive.

Earnings components to be included in this sum:Salary; wages; commission; bonus; overtime; statutory sick pay; statutory maternity pay; statutory paternity pay (ordinary or additional); and statutory adoption pay.

SUM_PRP £xx,xxx,xxx.xx

NB1: This is an exhaustive list; there are no further additions or omissions. These terms rely on common usage definitions. It is for the employer to determine if a payment they are making falls into one of the components of pay that make up qualifying earnings.

NB2: The system must consider what is payable (ie due to be paid) in the pay reference period, irrespective of the period that the payment relates to (eg if a bonus is due to be paid in March in relation to performance in January, then this is included in the earnings to be assessed in March, not January). The requirement to consider what is payable or due to be paid in a pay reference period may have wider implications for handling advances of pay and backdated pay.

Where an advance of pay takes place purely for practical or administrative purposes rather than as a requirement under the worker’s contract, then the advanced earnings should continue to be assessed in the future pay reference periods in which they are payable rather than in the period in which, for administrative purposes only, they are paid. For example where a weekly paid worker is paid an additional week’s worth of advanced pay to cover a forthcoming holiday period but this is not a contractual agreement, then the advanced earnings should be assessed as payable during the week that the worker is on holiday. In this way, an administrative arrangement for a ‘double payment’ for a low earner will not increase the likelihood of that worker earning above the threshold values and potentially falling to be automatically enrolled.

When handling backdated pay, care will need to be taken to understand when, under the worker’s contract, the backdated amount is actually payable. If the contract states that variable payments such as overtime, bonuses or pay awards are payable at a particular point in time, then irrespective of when the payments are actually processed and paid, they should be considered at the point when they were payable. If, however, under the contract variable payments are simply due at the point they are processed/paid/agreed, then they will only need to be considered at this point. For example where under their contract a monthly-paid worker is entitled to receive overtime worked in January in their February pay, even if there is a delay in processing the overtime meaning the overtime is not paid until March, the amount should still be considered as part of the total earnings in the February pay reference period. It is recognised that where there is a significant lag between a payment becoming due under the contract and it being paid, this would require the employer to re-calculate the earnings payable across a number of pay reference periods and may, in marginal cases, identify workers who have not been automatically enrolled on time. In such cases, employers will need to take reasonable corrective action to address these breaches.

NB3: As the system must consider what is payable, this means that if any errors are made eg underpayments or overpayments the amounts due must be assessed in the pay reference period they ought to have been paid in. Similarly if an employer runs supplementary payroll runs (that are not correcting errors) this must be included in the pay reference period it is payable in (see paragraph 139 in the further guidance part of this section on page 27). continued...






C8 Qualifying Earnings payable in Pay Reference Period

In order to assess whether a worker has qualifying earnings in any Pay Reference Period, the appropriate value of QE_LT and QE_UT should be selected for the period in use (see A2 and A3 on pages 35-36).

The calculation is then as follows:

QE_PRP = the lower of: [SUM_PRP – QE_LT] OR [QE_UT – QE_LT]

If QE_PRP > £00.00 then the worker has qualifying earnings for the purposes of the employer duties.

QE_PRP £xx,xxx,xxx.xx

C9 Earnings above the automatic enrolment trigger in PRP

In order to assess whether a worker has earnings above the automatic enrolment trigger in any Pay Reference Period, the appropriate value of AE_trig should be selected for the period in use (see A4 on page 37).

The calculation is then as follows:

AE_PRP = SUM_PRP – AE_trig

If AE_PRP > £00.00 then the worker’s earnings are sufficient to trigger automatic enrolment, providing the other necessary conditions are met (see C10 below).

AE_PRP Date

C10 Eligible jobholder status

The employer is obliged to automatically enrol workers who are, or become, eligible jobholders.

Although the assessment of eligible jobholder status occurs every pay reference period it is important to remember that the calculation within the payroll system is still making the assessment as at a specific date – as at the assessment date falling within the pay reference period. In systems this means looking at the age on the assessment date and calculating the qualifying earnings payable in the pay reference period within which the assessment date occurs.






A worker is an eligible jobholder if:

EJ_flag = YIF[AGE ON latest of [[PRP_start OR Duty_start OR Employment_start OR 22_date OR Pension_notice_date OR [DB_phasing_end + one day] OR [Wor_postpone_end + one day] OR [EJ_postpone_end + one day]] IF ≥ PRP_start AND ≤ earliest of [PRP_end OR Employment_end OR SPA_date]] IF ≥ 22 AND < SPA]ANDAE_PRP > 0

NB1: Certain events end eligibility. In this case employment end or reaching SPA date. Where either of these dates fall within a pay reference period and there is an assessment date or dates before them, the system must still make the assessment.

C11 Date on which a worker first becomes an eligible jobholder

The date on which a worker becomes an eligible jobholder for the first time is important. This is because it will determine the date when automatic enrolment, or the start of an eligible jobholder postponement period, must take place.

This date therefore corresponds to the relevant assessment date in the pay reference period within which it falls.

EJ_date is latest of [Duty_start OR Employment_start OR 22_date OR PRP_start]IF[AGE ON Latest of [Duty_start OR Employment_start OR 22_date OR PRP_start] IF ≥ PRP_start AND ≤ earliest of [PRP_end OR Employment_end OR SPA_date]] ≥ 22 AND <SPAANDAE_PRP > 0

EJ_date will depend on which was the last of the eligible jobholder criteria to be met, eg if a worker met all other necessary conditions but was not yet 22 years old, EJ_date will be the worker’s 22nd birthday.

EJ_date ‡ Date ‡

continued...






C11A Date on which worker first regains eligible jobholder status after being ineligible at the end of the previous postponement period

If a worker is not an eligible jobholder on the day after the expiry of a postponement period, they will not need to be automatically enrolled. Thereafter the employer must continue to monitor their status on an ongoing basis. At the point when the worker next becomes an eligible jobholder (because their earnings exceed the automatic enrolment trigger value), the employer can choose either to automatically enrol the worker with immediate effect or use a further eligible jobholder postponement period.

This data item denotes the point at which a worker first regains eligible jobholder status after being ineligible at the end of the previous postponement period.

EJ_repeat_date is PRP_start IF EJ_flag is Y AND EJ_Deferral_date_status = N AND EJ_date < PRP_start AND AE_date is not present

You cannot achieve an EJ_repeat_date if you have not yet achieved an EJ_date.

EJ_repeat_date ‡

Date ‡

C12 Non-eligible jobholder status

There is a further category of workers ‘non-eligible jobholders’ who are not automatically enrolled but who can opt in to an automatic enrolment pension scheme if they wish.

There are two types of non-eligible jobholder:

A. Workers aged between 16 and 22 or between state pension age and 75 who have earnings above the automatic enrolment trigger; and

B. Workers aged 16 to 75 who have qualifying earnings that do not exceed the automatic enrolment trigger.

Again the system is still making the assessment as at a specific date – as at the assessment date falling within the pay reference period.

JH_flag ‡ Y/N ‡






A worker is a non-eligible jobholder if:

JH_flag = YIF[AGE ON latest of [[PRP_start OR Duty_start OR Employment_start OR 16_date OR 22_date OR SPA _date OR Pension_notice_date OR [DB_phasing_end + one day] OR [Wor_postpone_end + one day] OR [EJ_postpone_end + one day]] IF ≥ PRP_start AND ≤ earliest of [PRP_end OR Employment_end OR 75_date]] IF ≥ 16 AND < 22] ANDAE_PRP > 0

OR

IF[AGE ON latest of [[PRP_start OR Duty_start OR Employment_start OR 16_date OR 22_date OR SPA _date OR Pension_notice_date OR [DB_phasing_end + one day] OR [Wor_postpone_end + one day] OR [EJ_postpone_end + one day]] IF ≥ PRP_start AND ≤ earliest of [PRP_end OR Employment_end OR 75_date]] IF ≥ SPA AND < 75]ANDAE_PRP > 0

OR

IF[AGE ON latest of [[PRP_start OR Duty_start OR Employment_start OR 16_date OR 22_date OR SPA_date OR Pension_notice_date OR [DB_phasing_end + one day] OR [Wor_postpone_end + one day] OR [EJ_postpone_end + one day]] IF ≥ PRP_start AND ≤ earliest of [PRP_end OR Employment_end OR 75_date]] IF ≥ 16 AND < 75]ANDQE_PRP > 0ANDAE_PRP ≤ 0

NB1: Certain events end eligibility. In this case employment end or 75 date. Where either of these dates fall within a pay reference period and there is an assessment date or dates before them, the system must still make the assessment.

continued...






NB2: Where SPA date falls part way through a pay reference period and a worker’s earnings are above the earnings trigger for automatic enrolment, the data item here and in C10 will return EJ flag = Y and JH flag = Y in the same pay reference period. This is because the worker will be an eligible jobholder for part of the period up to SPA and a non-eligible jobholder for the part of the period from SPA.

NB3: Conversely where 22 date falls part way through a pay reference period and a worker’s earnings are above the earnings trigger for automatic enrolment, the data item here and in C10 will return EJ flag = Y and JH flag = N in the same pay reference period. As the worker is a non-eligible jobholder for the period from the start of the pay reference period to immediately before the 22nd birthday JH flag should = Y. The reason for this anomaly is that the latest assessment date for both the assessment of eligible jobholder and non-eligible jobholder status is 22 date. An employer will need to ensure that there other ways to identify the minority of cases where this occurs where the start of the PRP will also be the first time that non-eligible jobholder status is met.

C12A Date on which a worker first becomes a non-eligible jobholder

Depending on whether the employer is using a postponement period and on which type of postponement period notice they provide (see section 2), the employer may be obliged to provide non-eligible jobholders (both those who are and who are not active members of qualifying pension schemes) with information about their rights under the legislation. The deadlines for providing the relevant information are determined by when the worker first attained non-eligible jobholder status.

As with C11, this date corresponds to the relevant assessment date in the pay reference period.

JH_date will depend on which was the last of the non-eligible jobholder criteria to be met, eg if a worker met all other necessary conditions but was not yet 16 years old, JH_date will be the worker’s 16th birthday.

JH_date is latest of [Duty_start OR Employment_start OR 16_date OR SPA_date OR PRP_start]IF[AGE ON Latest of [Duty_start OR Employment_start OR 16_date OR SPA_date OR PRP_start] IF ≥ PRP_start AND ≤ earliest of [PRP_end OR Employment_end OR 75_date]] ≥ 16 AND <22ANDAE_PRP > 0

JH_date ‡ Date ‡






OR

IF[AGE ON Latest of [Duty_start OR Employment_start OR 16_date OR SPA_date OR PRP_start] IF ≥ PRP_start AND ≤ earliest of [PRP_end OR Employment_end OR 75_date]] ≥ SPA AND <75 AND AE_PRP > 0

OR

IF[AGE ON Latest of [Duty_start OR Employment_start OR 16_date OR SPA_date OR PRP_start] IF ≥ PRP_start AND ≤ earliest of [PRP_end OR Employment_end OR 75_date]] ≥ 16 AND <75ANDQE_PRP > 0ANDAE_PRP ≤ 0

C13 Entitled worker status

There is a final category of workers are the ‘entitled workers’ who are not automatically enrolled but who can ‘join’ a pension scheme if they wish. There are fewer criteria for the pension scheme that the employer is obliged to use in such circumstances (please see B12 on page 51).

A worker is an entitled worker if:

Wor_flag = YIF[AGE ON latest of [[PRP_start OR Duty_start OR Employment_start OR 16_date OR Pension_notice_date OR [DB_phasing_end + one day] OR [Wor_postpone_end + one day] OR [EJ_postpone_end + one day]] IF ≥ PRP_start AND ≤ earliest of [PRP_end OR Employment_end OR 75_date]] IF ≥ 16 AND < 75]ANDQE_PRP ≤ 0

Wor_flag ‡ Y/N ‡

continued...






NB1: Certain events end eligibility. In this case employment end or 75 date. Where either of these dates fall within a pay reference period and there is an assessment date or dates before them, the system must still make the assessment.

NB2: Where SPA date falls part way through a pay reference period and a worker’s earnings are above the earnings trigger for automatic enrolment, the data item here and in C10 will return EJ flag = Y and Wor flag = Y in the same pay reference period. This is because the worker will be an eligible jobholder for part of the period up to SPA and an entitled worker for the part of the period from SPA.

NB3: Conversely where 22 date falls part way through a pay reference period and a worker’s earnings are above the earnings trigger for automatic enrolment, the data item here and in C10 will return EJ flag = Y and Wor flag = N in the same pay reference period. As the worker is an entitled worker for the period from the start of the pay reference period to immediately before the 22nd birthday Wor flag should = Y. The reason for this anomaly is that the latest assessment date for both the assessment of eligible jobholder and entitled worker status is 22 date. An employer will need to ensure that there other ways to identify the minority of cases where this occurs where the start of the PRP will also be the first time that entitled worker status is met.

C13A Date on which a worker first becomes an entitled worker

Depending on whether the employer is using a postponement period and on which type of postponement period notice they provide (see section 2), the employer may be obliged to provide an entitled worker who is not a member of a qualifying pension scheme with information about their right to join a pension scheme under the legislation. The deadline for providing the relevant information is determined by when a worker first achieved an entitled worker status. Wor_date is latest of [Duty_start OR Employment_start OR 16_date OR PRP_start]IF[AGE ON latest of [Duty_start OR Employment_start OR 16_date OR PRP_start] IF ≥ PRP_start AND ≤ earliest of [PRP_end OR Employment_end OR 75_date]] ≥ 16 AND < 75ANDQE_PRP ≤ 0

Wor_date ‡ Date ‡

C14 Automatic enrolment date

The automatic enrolment date is the date from which membership of a qualifying pension scheme must be effective when an eligible jobholder is automatically enrolled.

AE_date ‡ Date ‡






Unless the employer has chosen to use a postponement period, a worker’s automatic enrolment date is the date on which they become an eligible jobholder for the first time. Where the employer has chosen to use a postponement period, the automatic enrolment date is the day after the end of the postponement period, assuming all other necessary conditions are met on that date.

AE_date is the latest of [[EJ_date OR [Wor_postpone_end + one day] OR [EJ_postpone_end + one day] OR [DB_phasing_end + one day] OR EJ_repeat_date] IF ≥ latest of [PRP_start OR [Wor_postpone_end + one day] OR [EJ_postpone_end + one day] OR [DB_phasing_end + one day]] AND ≤ earliest of [PRP_end OR Employment_end OR SPA_date]]ANDEJ_flag = YANDDB_flag = NANDWor_postpone_flag = NANDEJ_postpone_flag = N

The employer is obliged to start deducting contributions, as per the rules of the qualifying scheme in use, with immediate effect from the automatic enrolment date. It is important for payroll software to identify the automatic enrolment date, as a deduction of contributions will need to be made by the system at the same point as the automatic enrolment date is calculated.

NB1: A worker can only be automatically enrolled once per employment. In order to ensure the system does not identify multiple automatic enrolment dates, once the automatic enrolment date has been identified, the system should be configured to prevent identifying any further instances of the automatic enrolment date.

C15 Opt-in enrolment date

Both eligible and non-eligible jobholders who are not members of a qualifying pension scheme or not undergoing automatic enrolment are permitted to give notice to the employer that they wish to opt into pension saving (see B17 on page 52). Where the employer has chosen to use a worker or eligible jobholder postponement period, the jobholder remains entitled to opt in during the postponement period.

OE_date ‡ Date ‡

continued...






When the employer has received a notice and on the date they received the notice the worker was a jobholder they must follow the automatic enrolment process and create active membership with effect from the enrolment date. The enrolment date is the start date of active membership and the start date for the calculation of contributions.

In the pay reference period after the one in which the notice was received, the employer must assess the status of the worker, unless the notice was received after payroll arrangements had closed. If as a result of this assessment the worker is a jobholder then the first day of the pay reference period is the enrolment date.

If payroll arrangements have closed, then the assessment must take place in the second pay reference period after the notice was received. If as a result of this assessment the worker is a jobholder then the first day of this pay reference period is the enrolment date.

If on either of these assessments the worker is not a jobholder, the employer must continue to make an assessment of the worker as at the first day of each pay reference period until jobholder status is met. The enrolment date is the first day of the pay reference period in which the jobholder criteria is met.

See C32 for JH_OE_date, the pre-cursor to this calculation.

[OE_date = PRP_startIF JH_OE_date is PresentANDJH_OE_date ≤ PRP_startANDAGE ON PRP_start ≥16 AND <75ANDQE_PRP>0ANDMemb_QPS_flag = NANDEmployment_end ≥ PRP_start]

NB1: Where the worker meets the eligible jobholder criteria before the enrolment date is reached then automatic enrolment takes precedence unless eligible jobholder postponement is used.






NB2: It is possible for both an opt-in enrolment date and automatic enrolment date (C14 on page 64) to be the same date.

C16 Commencement of contributions date

The contributions date is the date from which the calculation and deduction of contributions must be made when:

A. A jobholder is automatically enrolled or has opted in, or

B. When an entitled worker has given a worker joining notice

It is important to note that the employer is not obliged to calculate and deduct contributions according to any formula set out in the legislation. Instead, the employer is responsible for satisfying themselves that the pension scheme they intend to use meets a number of qualifying criteria, including, where relevant, a member entitlement equivalent to the minimum contribution level set out in legislation. Once the employer has examined the pension scheme and is satisfied it meets the qualifying criteria, then the contributions to be deducted and paid are determined by the rules of/agreements with the pension scheme itself.

This means that the pension scheme may use qualifying earnings as its definition of pay. Or it may retain its existing definition of pensionable pay with no disregard of earnings (ie contributions due from the first pound of earnings). See paragraphs 58 to 84 in section 1 on pages 11 to 17 for more background information.

The contributions date is the same date as the automatic enrolment date or opt-in enrolment date or worker join date. However, there is no contributions date for workers who are already members of a qualifying pension scheme on duty start (although this item may be held in existing data items on a payroll system).

[Cont_date = AE_date OR[Cont_date = OE_date]OR[Cont_date = Worker_join_date]

Cont_date ‡ Date ‡

continued...






Where a worker has previously opted in to a qualifying pension scheme and has subsequently ceased active membership of that scheme and triggers an automatic enrolment date, the commencement of contributions date should be overwritten with effect from the automatic enrolment date. Conversely where an eligible jobholder is automatically enrolled, ceases and active membership and then opts in, the commencement of contributions date should be overwritten with effect from the enrolment date.

Where automatic enrolment date and enrolment date fall in the same pay reference period, the contributions date is the earliest of these dates.

[Cont_date is earliest of [AE_date OR OE_date OR Worker_ join_date].

NB1: With immediate effect from the contributions date, the payroll system should calculate and deduct the correct pensions contributions, according to the rules set up for the employer’s chosen pension scheme. If the payroll system is calculating the employer’s contributions as well we would expect that worker and employer contributions are shown in the system separately. If the payroll system is to assess eligibility and deduct contributions on time intrinsically without user intervention, the employer must have informed the payroll systems of the contributions rules to be applied to each worker in advance (see B15 on page 52).

Where the contributions date happens to fall after the date on which earnings are paid in a pay reference period, then by law, the employer may only deduct contributions from subsequent pay reference periods. The deductions that should be made in following pay reference periods must nevertheless reflect the contributions required from the contributions date in the current pay reference period. In order to ensure a legal deduction can be made in the current pay reference period under all circumstances, the employer can use a postponement period to ensure that the contributions date coincides with the start of the pay reference period and thereby never falls after the payment date.

NB2: It is possible that a worker’s automatic enrolment date, and their contributions date, do not coincide with the start of a pay reference period. If this occurs, unless the rules of the pension scheme in use state otherwise, then the pensions contributions deducted should not be based on earnings over the whole of the pay reference period but should be calculated on a pro-rata basis with effect from the contributions date. The need to calculate pro-rata contributions can be wholly avoided if the employer uses the worker or eligible jobholder postponement period (see B4-B7 on pages 42-47) to ensure automatic enrolment only takes place with effect from the start of a period. If the contributions date falls after the start of a pay reference period, the earnings and the pensions contributions must be calculated on a pro-rata basis and should be determined as follows:

Pro-rata pensionable earnings = [Total pensionable earnings (as defined by pension scheme rules) for the period] ÷ [Number of calendar days (including working days, non-working days and bank holidays) from [latest of PRP_start OR Duty_start OR Employment_start] to [earlier of Employment_end OR PRP_end] inclusive] x [Number of calendar days from Cont_date to [earlier of Employment_end OR PRP_end] inclusive]. The results should be rounded to the nearest penny with exactly half a penny rounded up.






Boundary examples of the calculation of pro-rata pensionable earnings now follow:

Example 1Long-term worker paid £12,000 per annum in 12 equal monthly amounts of £1,000 (all of which is pensionable under the rules of the employer’s chosen qualifying pension scheme). Worker reaches 22nd birthday on 24 January 2011.Pay reference period is 1-31 January 2011Automatic enrolment date and contributions date is 24 January 2011Pro-rata pensionable earnings = [£1,000 ÷ 31 x 8] = £258.06

Example 2Long-term worker paid £12,000 per annum in 12 equal monthly amounts of £1,000. January’s overtime of £322 is paid with February’s basic pay (all pay is pensionable under the rules of the employer’s chosen qualifying pension scheme). Worker reaches 22nd birthday on 24 February 2011Pay reference period is 1-28 February 2011Contributions date is 24 February 2011Pro-rata pensionable earnings = [£1,322 ÷ 28 x 5] = £236.07

Example 3Long-term worker paid £500 per week on Wednesdays for the previous Sunday to following Saturday (all of which is pensionable under the rules of the employer’s chosen qualifying pension scheme). Worker reaches 22nd birthday on 24 February 2011Pay reference period is 20-26 February 2011Contributions date is 24 February 2011Pro-rata pensionable earnings = [£500 ÷ 7 x 3 ] = £214.29

Example 4Long-term worker paid £500 per week fully in arrears on Fridays for the 7 days ending on the previous Saturday. Some overtime was worked making the total pay accrued in week ending 19 February 2011 but payable in week ending 26 February £589.03 (all of which are pensionable under the rules of the employer’s chosen qualifying pension scheme). Worker reaches 22nd birthday on 24 February 2011Relevant pay reference period is 20-26 February 2011Contributions date is 24 February 2011Pro-rata pensionable earnings = [£589.03 ÷ 7 x 3] = £252.44

C17 Opt-out refund due

If a jobholder opts out of a qualifying pension scheme during the opt-out period following automatic enrolment or opt in, the employer must refund to the jobholder any contributions paid to the scheme by the jobholder except where any of these refunds are required to be paid as tax by a specified date.

OptOut_ref_due ‡

Date ‡

continued...






The date depends on the date a valid opt-out notice is given to the employer (see B10 on page 50). If the opt-out notice is given to the employer before their payroll arrangements have closed, then the refund must be completed within one calendar month of OptOut_date. If the opt-out notice is given to the employer after their payroll arrangements have closed, then the refund must be completed by the end of the second following pay reference period.

The due date for the opt-out refund is determined in two ways:

1. OptOut_ref_due = OptOut_date + one month IF OptOut_date < next payroll close

2. OptOut_ref_due = [the second future instance of PRP_end] after OptOut_date IF OptOut_date ≥ next payroll close

NB1: As is already the case today, pension scheme rules will determine whether a refund is due if active membership terminated after the end of the opt-out period. In such cases, existing arrangements for achieving this through payroll would still apply.

NB2: Where automatic enrolment took place close to the end of a tax year, the opt-out period will extend into the following tax year. This could result in the need to make a refund in respect of deductions from the previous tax year. The need to process refunds relating to the previous tax year can be wholly avoided if the employer uses the postponement period (see B4-B7 on pages 42-47) to ensure automatic enrolment does not take place within, at most, one calendar month plus six weeks from the end of the tax year.

C18-29

Intentionally blank

C30 EJ status as at the deferral date

This data item is designed to capture the worker’s status as at the latest deferral date ([Wor_postpone_end + one day] or [EJ_postpone_end + one day]) that falls within the current PRP. If the worker has an eligible jobholder status on the deferral date the employer will not able to use a further eligible jobholder postponement period. If the worker is not an eligible jobholder on this date, the employer will be able to recognise that an eligible jobholder postponement period can be used from the next date in which the worker triggers an eligible jobholder status.

EJ_deferral_date_status ‡

Y/N ‡






EJ_deferral_date_status = YIF [AGE O-N Latest of [Wor_postpone_end + one day] OR [EJ_postpone_end + one day] IF ≥ PRP_start AND ≤ earliest of [PRP_end OREmployment_end OR 75_date]] ≥ 22 AND < SPAAND AE_PRP > 0

This data item should be date stamped on expiry of each postponement period (on the deferral date) to provide an accurate snap shot of the workers status at a point in time.

NB1: It is possible for both Wor_postpone_end + one day or EJ_postpone_end + one day to both appear in the same pay reference period. In this instance, the employer will need to know whether the worker was an eligible jobholder at both.

C31 Worker status as at the date pension notice was received

In order to determine what route should be taken once notice to join a pension scheme, whether an opt-in notice or a joining notice, is received by the employer, the system should record the worker’s status on the date the pension notice was received.

Pension_notice_status is JH (eligible jobholder or non-eligible jobholder)IFPension_notice_date ≥ PRP_start AND ≤ earliest of [PRP_end OR Employment_end OR 75_date] AND AGE ON Pension_notice_date ≥ 16 AND < 75 AND QE_PRP > 0

Pension_notice_status ‡

JH/EW ‡

continued...







C31 continued...

ORPension_notice_status is EW IF Pension_notice_date ≥ PRP_start AND ≤ earliest of [PRP_end OR Employment_end OR 75_date]AND AGE ON Pension_notice_date ≥ 16 AND < 75 ANDQE_PRP ≤ 0

NB1: The system will only know whether the pension notice date at B17 falls within the period PRP start (for the pay reference period in which the assessment is running) to the date the assessment is being made. If a pension notice is received after the date the assessment is run but prior to the end of the pay reference period, user intervention will be required to record the status of the worker on the date the pension notice was received and thus determine what action the employer must take.

C32 Date in which an opt-in enrolment date can first apply

The pre-cursor to C15. The identification of the opt-in enrolment date starts on the first day of the pay reference period after the pension notice was received if it was received before payroll arrangements had closed. Or it starts on the first day of the second pay reference period after the pension notice had been received if payroll arrangements had closed on the date the notice was received.

The identification of the enrolment date is run in C15. The JH_OE_date signifies the first available date where the system must start that assessment.

[JH_OE_date = [PRP_end + one day]IFPension_notice_date ≥ PRP_start AND ≤ earliest of [PRP_end OR Employment_end OR 75_date]AND Pension_notice_date ≤ PAYROLL CLOSE AND Pension_notice_status is JH AND Memb_QPS_flag = N

JH_OE_date ‡ Date ‡





C32 continued...

OR[JH_OE_date = second future instance of PRP_start] IF Pension_notice_date ≥ PRP_start AND ≤ earliest of [PRP_end OR Employment_end OR 75_date] AND Pension_notice_date > PAYROLL CLOSE AND Pension_notice_status is JH AND Memb_QPS_flag = N

NB1: Where the system does not hold future PRPs within a table, the second future instance of PRP_start can be calculated by: [PRP_end + one day + PRP + one day]

Example 1 Where the PRP is calendar monthly (1-31 May) and pension notice is received on 15 May: first instance of PRP_start: 1 June; second instance of PRP_start: 1 July (PRP_end + one day + Calendar Monthly + one day)

Example 2 Where the PRP is fortnightly (6-19 May) and Pension notice is received on 15 May: first instance of PRP_start: 20 May; second instance: 3 June (PRP_end + one day + Fortnight (or 14days) + one day)


Report capabilities

Worker status Reports listing workers with: For these workers the employer must:

1 All workers who become eligible jobholders for the first time in the current PRP and who fall to be automatically enrolled

Specify employee information; name, employee number, AE_dateIFAE_date ≥ PRP_start AND ≤ PRP_end

Complete automatic enrolment (including providing the jobholder with automatic-enrolment information and providing the qualifying pension scheme with specified jobholder information)

2 All workers who achieve a non-eligible jobholder status for the first time in the current PRP

Specify employee information; name, employee number, IFJH_date ≥ PRP_start AND ≤ PRP_endAND Memb_QPS=N

Provide the jobholder with the information specified about the right to opt in to a qualifying pension scheme if they have not previously received the information for example via a postponement notice

3 All workers who achieve an entitled worker status for the first time in the current PRP

Specify employee information; name, employee number, IFWor_date ≥ PRP_start AND ≤ PRP_endAND Memb_QPS=N

Provide the entitled worker with the information specified about the right to join a pension scheme if they have not previously received the information for example via a postponement notice

4 All workers who have an eligible or non-eligible jobholder status as at Pension_notice_date

Specify employee information; name, employee number, pension notice dateIFPension_notice_status = JHAND Pension_notice_date ≥ PRP_start AND ≤ PRP_endAND Memb_QPS=N

Identify that the worker is a jobholder and so the opt in process must be followed and start process of identifying the enrolment date

2.5 Report capabilities

175. Employers may require their payroll system to produce reports listing certain categories of workers. These output/reports from the payroll system will be needed as inputs/prompts for the employer to take further action in order to comply with remaining aspects of the duties (eg around the administration of automatic enrolment, opt out, opt in and the provision of information).



Report capabilities continued...

Worker status Reports listing workers with: For these workers the employer must:

5 All workers who were entitled workers as at the Pension_notice_date

Specify employee information; name, employee number, pension notice dateIFPension_notice_status = EWANDPension_notice_date ≥ PRP_start AND ≤ PRP_endAND Memb_QPS=N

Identify that the worker is a jobholder and so the opt in process must be followed and complete joining process

6 All workers with an enrolment date in the PRP

Specify employee information; name, employee number, enrolment dateIFOE_date ≥ PRP_start AND ≤ PRP_end

Complete opt in enrolment (including providing the jobholder with automatic enrolment information and providing the qualifying pension scheme with specified jobholder information)

7 All workers who become jobholders and are active members of a qualifying scheme with the employer

Specify employee information; name, employee number, IFAE_date ≥ PRP_start AND ≤ PRP_endORJH_date ≥ PRP_start AND ≤ PRP_endAND Memb_QPS=Y

Provide the jobholder with the information specified for existing members of qualifying schemes



Registration information

176. Shortly after they become subject to the duties for the first time, the employer is obliged to submit information to the regulator giving details of how they have discharged their duties. This is called registration.

177. The deadline for registration is four months from the employers staging date or where the staging period has ended, from the day that PAYE income first becomes payable in respect of any worker.

178. The data generated by the system in the core functionality may be used to support an employer in complying with the registrations requirements. Alternatively an employer may require their wider business software system using the calculations in this section, to support their registration requirements.

179. Where the employer has chosen not to use a postponement period, the employer has a period of one month from the duty start date, in which to complete automatic enrolment. Where the employer has chosen to use a worker postponement period (or multiple postponement periods) for a period of up to three months, the employer has a period of one month from the deferral date in which to complete automatic enrolment.

180. It is therefore possible for the employer to run this report at any point from the duty start date and within the four month registration window. Automatic enrolment will have to have been completed in order to provide the information required at registration. The table on page 76 includes the following information that is required at the point of registration: ‡

Note 1: All data will be required to be collated where the employer is running multiple payrolls and/or where there are workers who are not included on the payroll.

Note 2: This list only covers those registration data requirements that can be supported by payroll systems. It is not an exhaustive list of all the registration data requirements. More information about the employer’s registration duties will be provided on the regulator’s website later this year.

Note 3: The rules and calculations for re-registration with the regulator (at re-enrolment) are not covered in this guide because these duties will not arise for employers before 2015 and it is anticipated that legislation will be amended to achieve minor but important technical improvements, the detail of which remains to be clarified in legislation. It is anticipated that a later version of this guide will cover automatic re-enrolment and re-registration.



Registration continued...

Registration question Further guidance Reports listing workers with:

The total number of workers employed on the employer’s staging date

This is the number of workers in employment on the employer’s staging date. This report will generate the number of workers on each payroll. The employer when registering will have to add in any other workers who are not included on payroll.

For the complete workforce, the number of workers that meet the following conditions:

Employment_start ≤ Duty_start AND Employment_end ≥ Duty_start

The number of eligible jobholders automatically enrolled into each scheme

Registration is a snapshot of what the employer has done with the workers that were in employment at their staging date. The employer must provide the number of these workers who they have automatically enrolled. They will either have automatically enrolled these eligible jobholders with effect from their staging date (where the employer did not use postponement) or with effect from the deferral date(s) (where the employer did use postponement for all their workers at staging) or with effect from the staging date for some and the deferral date(s) for some (where the employer uses postponement for some of their workers at staging). So where an employer:

A. did not use postponement at staging date: the employer must provide the number of eligible jobholders in employment at their staging date who they automatically enrolled with effect from the staging date. This will include anyone who subsequently opted out or left employment. Exclude any eligible jobholders with an automatic enrolment date after the staging date. Exclude anyone who opted in or asked to join the scheme. The information is to be provided per pension scheme that was used for the automatic enrolment

For each pension scheme that was used to automatically enrol these eligible jobholders, the number of eligible jobholders that meet the following conditions:

Employment_start ≤ Duty_start AND Employment_end ≥ Duty_start AND Memb_QPS_date ≥ Duty_start AND AE_date is Duty_start OR AE_date is [Wor_postpone_end + one day]


continued...




B. used postponement for some of their workers at their staging date, and the workers postponed all have the same deferral date; the employer must provide the number of eligible jobholders in employment at their staging date who a) they automatically enrolled with effect from the staging date and b) who were eligible jobholders on the deferral date for the postponement used at staging. This will include anyone who subsequently opted out or left employment. Exclude any eligible jobholders with an automatic enrolment date after the staging date. Exclude any eligible jobholders as at any other deferral date (ie for whom postponement was used after staging). Exclude any eligible jobholders on the deferral date who were not in employment on the staging date. Exclude anyone who opted in or asked to join the scheme The information is to be provided per pension scheme that was used for the automatic enrolment

C. used postponement for some of their workers at their staging date, and the workers postponed have different deferral dates; the employer must provide the number of eligible jobholders in employment at their staging date who a) they automatically enrolled with effect from the staging date and b) who were eligible jobholders on each of the deferral dates for the postponement used at staging. This will include anyone who subsequently opted out or left employment. Exclude any eligible jobholders with an automatic enrolment date after the staging date. Exclude any eligible jobholders as at any other deferral date (ie for whom postponement was used after staging). Exclude any eligible jobholders on the deferral dates that were not in employment on the staging date. Exclude anyone who opted in or asked to join the scheme. The information is to be provided per pension scheme that was used for the automatic enrolment



continued...



The total number of workers who were existing active members of a qualifying pension scheme on and before the staging date

This is the total number of workers who were already an existing member of a qualifying scheme on the employer’s staging date. Exclude any worker who has been automatically enrolled, opted in to or joined the pension scheme on or after the staging date.

The employer is required to report on all workers that meet the following conditions:

Employment_start ≤ Duty_start AND Employment_end ≥ Duty_start AND Memb_QPS_flag = Y AND Memb_QPS_date < Duty_start

The number of eligible jobholders subject to the transitional period

This will not apply for the majority of employers. This only applies where the employer has a DB or hybrid pension scheme (see Detailed guidance no.3b – the transitional period for defined benefit and hybrid pension schemes). When they first become subject to the duties, an employer with a qualifying DB scheme or qualifying hybrid scheme may defer automatic enrolment for workers that meet specified conditions for an initial transitional period. It does not delay automatic enrolment for all workers as it can only be applied to the workers that meet the conditions.

The employer is required to report the total number of workers that meet the following conditions:

Employment_start ≤ Duty_start AND Employment_end ≥ Duty_start AND DB_flag = Y

The total number or workers who were in employment as at the duty start date and who are not listed in the above three categories

This will be everybody else in employment on the staging date. For example, this will include any worker who is under 22 and above state pension age or who is earning less than £8,105 a year and is not already in a qualifying pension scheme.

The employer is required to report the total number of workers that do not meet conditions listed at points 2, 3 and 4. This can be calculated using a SUM of all workers who meet the conditions:

Employment_start ≤ Duty_start ANDEmployment_end ≥ Duty_start

Less the totals derived at question 2 + 3 + 4.



2.6 Record-keeping requirements

181. The employer is obliged to keep a number of records in relation to their compliance for six years and may authorise a third party to keep, preserve or provide the records on their behalf. Data generated by payroll systems using the calculations in this section that will support the employer in meeting the record-keeping requirements are the following:

• Name of every worker with a Cont_date

• NI number (where in existence) of every worker with a Cont_date

• DoB for every worker with a Cont_date

• AE_date for every worker who has one

• Worker_join_date for every worker who has one.

Following each instance of Cont_date:

• SUM_PRP in each pay reference period

• Evidence of the rule/formula used to calculate contributions required by the pension scheme for each jobholder

• The amount of contributions (both employer and member) payable in respect of each member in each pay reference period

• The amount of contributions (both employer and member) actually made/deducted in respect of each jobholder/member in each pay reference period.

182. It is worth noting that the employer is also obliged to keep records relating to their use of the postponement period. However these records relate specifically to the date on which the postponement period notice was provided. This is covered in the record-keeping requirements in section 2 of this guide.

183. The employer’s chosen pension scheme is also obliged to keep a number of records in relation to members. Data generated by the payroll system using the calculations in this section that will support the employer in providing accurate records to the pension scheme are the following:

Cont_date

Where Memb_QPS = Y,

• Name

• NI number (where in existence)

• DoB.



Section 3: Specification of data/routines for wider business support software

184. In this section we cover the data sources and calculation routines for the wider functionality that may support an employer in the end to end duties. Primarily this section covers the requirement to provide specified information to the worker on different occasions.

185. Section 3 is divided into five parts:

3.1 Overview

3.2 Table of data sources

3.3 Specification of calculation routines

3.4 Reports capability

3.5 Record-keeping.

3.1 Overview186. Using the data, the system will be able

to calculate:

• Deadlines for the legally prescribed automatic enrolment, opt out and refund processes

• The provision of information to a number of categories of workers

• The deadline for the employer to register relevant information with the regulator

• Wider record-keeping requirements.

187. The calculation routines described in this section make use of:

• Pensions reform data – page 34

• Worker data – page 40

• Additional worker data – page 83

• Data derived by the payroll (or other) system – page 95.


188. In this section we assume that a number of necessary conditions for compliance, which are not supported by software are continuously met under the duties. These assumptions are:

• Prior to becoming subject to the duties, employers have in place a pension scheme/pension schemes that meet the relevant ‘qualifying scheme’ criteria or ‘automatic enrolment scheme’ criteria in order to be used under the duties

• The employer is satisfied that its chosen scheme(s) continues to meet the relevant criteria on an ongoing basis. If this is not the case then the employer will have to automatically re-enrol affected members within specified timeframes

• The employer has identified those on the system who are ‘workers’

• The employer has identified the workers that meet the definition of ‘working or ordinarily working in the UK under the worker’s contract’ and it is these workers that will undergo the assessment of age and earnings in the software system. Anyone employing a worker who works, or ordinarily works, in the UK under a worker’s contract will have duties under the Pensions Act 2008

• The worker remains an active member of the pension scheme unless an act on the worker’s part causes them to cease active membership (ie they decide to terminate membership, leave work, retire or die). If anything is done by the employer, pension scheme or any other third party to interrupt active membership then the employer will be obliged to automatically re-enrol the affected jobholder within specified timeframes.

189. The approach in this section is one way of achieving the necessary function within the system. However, there may be other ways to achieve the same function. It is for developers to decide what is appropriate within their system(s).



3.2 Data sources

Note 1: ‘Date’ means the data is assumed to be in the format dd/mm/yyyy and is a valid date in the Gregorian calendar, although it is for individual systems to decide how dates are held internally. Some of the calculations listed below involve adding or subtracting a number of months to a particular date. Instructions for performing these calculations are provided below:

When adding months – Add the stated number of months, subtract one day and adjust the year value as necessary eg adding three months to 01/11/2011 and subtracting a day results in 31/01/2012.

When subtracting months – Subtract the required number of months, add one day and adjust the year value as necessary eg subtracting three months from 31/01/2012 and adding one day results in 01/11/2011.

Note 2: Where an employer has multiple contracts of employment with an individual worker, the employer must consider and, where appropriate, seek advice on whether the employment relationship is of a single employment with services being performed across each of the contracts. In such circumstances, all the duties apply only once to the worker (eg automatic enrolment, opt out etc). If an employer is of the view that each of the employment contracts with an individual is wholly separate, they must apply the duties separately in relation to each contract.

Note 3: Throughout these data items the deferral date (the end of the postponement period) corresponds to Worker postponement + one day or Eligible jobholder postponement + one day



Additional worker data



D1 Destined automatic enrolment scheme is a contract-based pension flag

Where the employer is using a contract-based workplace pension scheme (also known as a ‘personal pension scheme’) for automatic enrolment, there are modified requirements in respect of information and the automatic enrolment process.

WPP_flag Y/N

D2 Invalid opt-out notice given to employer

There are a number of requirements for opt-out notices to be valid. If the jobholder submits an invalid opt-out notice, the employer must inform the jobholder of the reasons why it is invalid and the opt-out period is extended.

The system could prompt the employer to consider whether an opt-out is valid to enable the employer to record their action and inform a jobholder about an invalid opt-out notice.

Invalid_optout_rec

Y/N

D3 Automatic enrolment information given*

As part of automatic enrolment and opt in, the employer must provide the jobholder with specified information called enrolment information.

This is the date the enrolment information is given to the jobholder. It is important for the system to record this date as it may be used to define the start of the opt-out period in some cases (see E3 on page 98).

The calculation for determining the deadline (AE_due) by when the enrolment information must be given is at E1 on page 96.

AE_info_giv must be ≤ AE_due

A template of this notice is available on our website at: www.thepensionsregulator.gov.uk/docs/Template_for_Letter_1_-_eligible_jobholder_no_postponement.doc

AE_info_giv Date

* The meaning of ‘given’ is as defined in the Interpretation Act 1978



continued...

Additional worker data continued...



D3A Jobholder information to pension scheme given

As part of automatic enrolment and opt in, the employer must provide the pension scheme with specified information about the jobholder.


JobH_info_giv must be ≤ AE_due

JobH_info_giv

Date

D4 Date contract-based pensions terms and conditions given to jobholder

Where an employer is using a contract-based pensions scheme for automatic enrolment or opt in, the employer must ensure the contract-based pensions provider also provides the jobholder with specified information known as ‘Terms and Conditions’.

It is important for the system to record this date as it may be used to define the start of the opt-out period in some cases (see E3 on page 98).


WPP_info_date must be ≤ AE_due

WPP_info_date

Date

D5 Date active membership of an automatic enrolment scheme achieved

This is the date on which the administrative steps for creating active membership have been achieved following automatic enrolment and opt in into a pension scheme other than a contract based pension scheme.

The employer will rely on their chosen pension scheme to inform them of this date. Memb_QPS_flag (see B3 on page 41) should move from N to Y with effect from this date, if it has not already been moved following the deduction of contributions. Whatever date these administrative steps are completed on the start date of active membership must be backdated to the automatic enrolment date or enrolment date for opt in.

Active_memb_complete

Date






It is important for the system to record this date as it may be used to define the start of the opt-out period in some cases (see E3 on page 98).

The calculation for determining the deadline (AE_due) by when the active membership of a qualifying pension scheme must be achieved is at E1 on page 96.

Active_memb_complete must be ≤ AE_due

D6 Type of Postponement Period Notice to be given

In order to use the worker or eligible jobholder postponement period, the employer must issue a notice, containing specified information to the affected worker(s). There are up to four different options for the postponement notice which vary in the amount of information they must contain – these are described below at D7-D10 on pages 87-90.

To varying degrees each of the options contains some of the same information as the separate information requirements for each category of worker (as described in E2 on page 97, E5 on page 99 and E6 on page 101). This means that depending on the employer’s chosen option then those separate requirements may no longer apply to that worker.

That is why it may be important for a software system supporting the wider end-to-end duties to understand which postponement period notice option the employer has chosen. This will enable the system to correctly identify which additional information provision duties will apply in future for that worker.

It is worth noting that none of the options for the postponement period notice incorporate the information that must be provided as part of automatic enrolment however it is possible for the employer to provide appropriately worded automatic enrolment information at the same time as they provide the postponement period notice, if they wish to do so.

It may be that the system should determine the type of postponement period notice to apply by reference to a user-determined rule rather than require user input for each worker record (eg the employer could stipulate that they will always issue a generic notice A for the worker postponement period).

Postpone_notice_type

Indicator of which of up to 4 options is given



continued...




D7 Worker Postponement Period General Notice A given

The first option for the postponement period notice is General Notice A. This notice may only be provided to workers affected by the worker postponement period. It must not be used for the eligible jobholder postponement period. The notice covers all categories of workers and it brings together a number of the separate information requirements for the different categories of workers:

• The information for non-eligible jobholders about their right to opt in to an automatic enrolment scheme (described at E5 on page 99)

• The information for entitled workers about their right to join a pension scheme (described at E6 on page 101).

• The information for jobholders (eligible or non-eligible) who are already active members of a qualifying scheme (described at E2 on page 97)

As the notice contains the same information as the separate information requirements for each category of worker, if this notice is used then those separate requirements no longer apply to that worker. This means an employer choosing this option does not need to act on expiry of the postponement period or thereafter to provide information as per the requirements at E2 on page 97, E5 and E6 on pages 99-101.

This data item is the date the Postponement Period General Notice A is given to the worker. It is important for the system to record this date as it is one of the records that the employer is obliged to keep.

The calculation for determining the deadline (Postpone_info_due) by when a postponement period notice (of any kind) must be given is at E8 on page 103.

Postpone_A_info_giv must be ≤ Postpone_info_due

The payroll-driven content of the information is found at row 6 at Annex A on page 104. A template of general notice A (which also includes the enrolment information) is available on our website at: www.thepensionsregulator.gov.uk/docs/Template_for_Letter_6_-_postponement_-_all_workers.doc

Postpone_A_info_giv

Date






D8 Worker Postponement Period General Notice B given

The second option for the postponement period notice is Postponement Period General Notice B. Like General Notice A, this notice may only be provided to workers affected by the worker postponement period and must not be used for the eligible jobholder postponement period. This notice is applicable to all workers excluding any (eligible or non-eligible) jobholders who are active members of a qualifying pension scheme with the employer. It is therefore most useful for employers who do not have a qualifying scheme in place before their staging point. The notice covers the information requirement for the following categories of workers:

• The information for jobholders about their right to opt in to an automatic enrolment scheme (described at E5 on page 99)

• The information for entitled workers about their right to join a pension scheme (described at E6 on page 101).

As the notice contains the same information as the separate information requirements for two categories of worker, if this notice is used then those separate requirements no longer apply to that worker. This means an employer choosing this option does not need to act on expiry of the postponement period or thereafter to provide information as per the requirements at E5 and E6 on pages 99-101.

This data item is the date the Postponement Period General Notice B is given to the worker. It is important for the system to record this date as it is one of the records that the employer is obliged to keep.


Postpone_B_info_giv must be ≤ Postpone_info_due

The payroll-driven content of the information is found at row 7 at Annex A on page 106. A template of general notice B (which also includes the enrolment information) is available on our website at: www.tpr.gov.uk/docs/Template_for_Letter_5_-_postponement_-_all_workers_except_existing_pension_members.doc

Postpone_B_info_giv

Date



continued...




D9 Postponement Period Tailored Notice given

The third and fourth options (see D10) for the postponement period are what are known as tailored postponement period notices.

Tailored notices may be provided to workers affected by the worker postponement period if the employer wishes to provide their workers only with the information that is relevant to the category they would fall into were they not subject to the worker postponement period.

The tailored nature of the notice means that the employer must have made an assessment of which category the worker would fall into before issuing the notice. The content of the notice is then determined by that category, there are separate mandatory information requirements depending on whether the worker would be a jobholder or entitled worker.

As the tailored information is only relevant to the category of worker the worker falls into at the start of the postponement period, on expiry of the period the employer need not issue further information if the worker’s category has not changed but will need continue to monitor age and earnings to identify the first time a change in category triggers any other information requirements.

The third postponement period notice option is the tailored notice for jobholders (includes eligible and non-eligible jobholders). It is optional at worker postponement but because the eligible jobholder postponement period can only be triggered when a worker attains or regains eligible jobholder status, the employer must always use this type of postponement period notice whenever they apply the eligible jobholder postponement period.

This data item is the date the postponement period tailored notice for jobholders is given to the worker. It is important for the system to record this date as it is one of the records that the employer is obliged to keep.


Postpone_tailor_JH_info_giv

Date






Postpone_tailor_ JH_info_giv must be ≤ Postpone_info_due

The payroll-driven content of the information is found at row 8 at Annex A on page 106. A template of the tailored notice for jobholders is available on our website at: www.thepensionsregulator.gov.uk/docs/Template_for_Letter_2P_-_non-eligible_and_postponement.doc. Software developers should note that this template uses the term ‘non-eligible jobholder’ and so if it is intended to use for jobholders (both eligible and non-eligible) this will need to be amended on the system version. Alternatively, there is another template version of this notice which is aimed at eligible jobholders as it also contains the enrolment information. This template is available here: www. thepensionsregulator.gov.uk/docs/Template_for_Letter_1P_-_eligible_jobholder_and_postponement.doc.

NB 1: If the employer chooses to use this option for worker postponement, then they will still have a requirement to issue entitled worker information on the first occasion that the worker meets that criteria. In practice this may mean that they will still need to assess the worker each pay reference period during the postponement period.

D10 Postponement Period Tailored Notice for Entitled Workers given

The fourth option for the postponement period notice is tailored for an entitled worker. If they use this type of postponement period notice, then the separate requirements to provide information about the right to join a (non-qualifying) pension scheme when a worker first becomes an entitled worker (as described at E6 on page 101) will no longer apply to that worker.


Postpone_tailor_wor_info_giv must be ≤ Postpone_info_due

The payroll-driven content of the information is found at row 9 at Annex A on page 106. A template of the tailored notice for entitled workers is available on our website at: www.thepensionsregulator.gov.uk/docs/Template_for_Letter_3P_-_entitled_worker_and_postponement.doc

Postpone_tailor_wor_info_giv

Date

NB 1: If the employer chooses to use this option for worker postponement, then they will still have a requirement to issue jobholder information on the first occasion that the worker meets the criteria to be a non-eligible jobholder. In practice this may mean that they will still need to assess the worker each pay reference period during the postponement period.



continued...




D11 Right to opt in information to jobholder given

The employer is obliged to provide jobholders with information that explains their right to opt in to an automatic enrolment pension scheme. This information must be provided no later than one month after the worker becomes a jobholder with a right to opt in for the first time. The employer is only obliged to provide this information once – per worker, per employment.

This information must be provided to a non-eligible jobholder on the first occasion they become a jobholder unless:

• they are an active member of a qualifying scheme

• they have previously been an eligible jobholder who was automatically enrolled and opted out

• the employer has previously applied a worker or eligible postponement period and provided the worker with any one of postponement period notices A, B or the notice tailored for jobholders (see D7, D8 and D9 on pages 87-89), or

• the non-eligible jobholder is subject to the DB/Hybrid transitional period (note the transitional period can only be applied to a worker who was an eligible jobholder on the employer’s first enrolment date).

It must also be provided to an eligible jobholder who has ceased active membership of a qualifying scheme, on the first occasion they are an eligible jobholder after membership ceased unless:

• they were previously a non-eligible jobholder and received the information

• the employer has previously applied a worker or eligible postponement period and provided the worker with any one of postponement period notices A, B or the notice tailored for jobholders (see D7, D8 and D9 on pages 87-89), or

• the eligible jobholder is subject to the DB/Hybrid transitional period. (note the transitional period can only be applied to a worker who was an eligible jobholder on the employer’s first enrolment date).

OptIn_info_giv

Date






The calculation for determining the deadline (OptIn_info_due) by when the information must be given is at E5 on page 98.

Optin_info_giv must be ≤ OptIn_info_due

The payroll-driven content of the information is found at row 2 at Annex A on page 104. A template of this notice is available on our website at: www.thepensionsregulator.gov.uk/docs/Template_for_Letter_2_-_non-eligible_no_postponement.doc

D12 Right to join information to worker given

The employer is obliged to provide entitled workers, who are not already contributing to a workplace pension scheme, with information that explains their right to join a pension scheme (there is no duty on the employer to provide a qualifying pension scheme with employer contributions for such workers). This information must be provided no later than one month after a worker becomes an entitled worker for the first time. The employer is only obliged to provide this information once – per worker, per employment.

This information must be provided to a worker on the first occasion they become an entitled worker unless:

• they are an active member of a qualifying scheme

• the employer has previously applied a worker or eligible postponement period and provided the worker with any one of postponement period notices A, B or the notice tailored for entitled workers (see D7, D8 on pages 87-88 and D10 on page 90), or

• the entitled worker is subject to the DB/Hybrid transitional period (note the transitional period can only be applied to a worker who was an eligible jobholder on the employer’s first enrolment date).

The calculation for determining the deadline (Notice_join_info_due) by when the information must be given is at E6 on page 101.

Notice_join_info_giv must be ≤ Notice_join_info_due

The payroll-driven content of the information is found at row 2 at Annex A on page 106. A template of this notice is available on our website at: www.thepensionsregulator.gov.uk/docs/Template_for_Letter_3_-_entitled_worker_no_postponement.doc

Notice_join_info_giv

Date






D13 DB phasing information to eligible jobholder given

When they first become subject to the duties, an employer with a qualifying DB scheme or qualifying hybrid scheme may delay automatic enrolment for workers that meet specified conditions until the end of a transitional period, even if they would otherwise fall to be automatically enrolled. The conditions that the worker must meet are that:

A. They are an eligible jobholder on the employer’s first enrolment date

B. That they have been employed by the employer for a continuous period before the first enrolment date

C. Prior to the employer’s first enrolment date for any worker, the worker is able to join a qualifying DB/hybrid pension scheme if they choose to do so

D. The DB/Hybrid pension scheme or schemes to which the worker is able to join remain a qualifying scheme for the remainder of the transitional period.

If they wish to use the DB/hybrid transitional period, the employer must provide the worker with a notice explaining this to them within one month of the employer’s first automatic enrolment date.

If the conditions in C and D above continue to be met, on expiry of the transitional period, the worker, providing they meet the necessary criteria for automatic enrolment, must be automatically enrolled into an automatic enrolment scheme or the employer can choose to use postponement for a period of up three calendar months.

The employer’s first enrolment date is the first day on which any of the employer’s workers meet the eligible jobholder criteria. This is likely to be their staging date but may be later. It will correspond to the earliest EJ_date triggered (see C11 on page 59).

The calculation for determining the deadline (DB_Phasing_info_due) by when the information must be given is at E9 on page 103.

DB_phasing_info_giv

Date


continued...





DB_Phasing_info_giv must be ≤ DB_phasing_info_due

The payroll-driven content of the information is found at row 10 at Annex A on page 106. A template of this notice is available on our website at: www.thepensionsregulator.gov.uk/docs/Template_for_Letter_1T_-_eligible_jobholder_pre-existing_right_to_DB_or_Hybrid.doc

D14 Active member information given to a jobholder

If on the staging date an eligible jobholder or a non-eligible jobholder is already a member of a qualifying pension scheme, the employer is obliged to provide them with specified information. The employer is also obliged to provide this information to any worker who becomes a jobholder and an active member of a qualifying scheme after the employer’s staging date. The employer is only obliged to provide this information once – per worker, per employment.

If the employer chooses to use postponement in respect of the worker and chooses to use general notice A as the postponement notice, then they will have fulfilled this information requirement for that worker.

Where the date that they first become a jobholder and an active member of a qualifying scheme is by virtue of automatic enrolment or opt in, this information requirement does not apply.

The employer must give the information before the end of the period of two calendar months from the staging date or the date on which the worker first becomes a jobholder and an active member.

The calculation for determining the deadline (Memb_QPS_info_due) by when the information must be given is at E2 on page 97.

Memb_QPS_info_giv must be ≤ Memb_QPS_info_due

The payroll-driven content of the information is found at row 3 at Annex A on page 106. A template of this notice is available on our website at: www.thepensionsregulator.gov.uk/docs/Template_for_Letter_4_-_workers_already_in_qualifying_pension.doc

Memb_QPS_info_giv

Date






D15 First enrolment date

Only relevant where the DB and Hybrid transitional period is intended to be used. The employer’s first enrolment date is the first day on which any of the employer’s workers meet the eligible jobholder criteria. This is likely to be their staging date but may be later. It will correspond to the earliest EJ_date triggered (see C11 on page 59).

First_enrol_date

Date

D16 Active membership of a QPS achieved through contractual enrolment flag

Some employers may choose to:

• immediately enrol all workers into a pension scheme when they first start work with the employer

• annually re-enrol workers back into the pension scheme if they have ceased membership in the year.

To do this, the employer must obtain the worker’s consent to deduct pension contributions and they often use contractual agreements with their staff (for example the contracts of employment) to obtain this consent. We describe this as contractual enrolment.

The new employer duties do not prevent an employer from continuing with agreements of this type, nor are they prevented from putting new agreements in place. However, the employer must understand how the employer duties impact on their current processes.

As a minimum they will still have to provide information to any jobholders who are members of the QPS and register with the regulator.

This flag is needed for deriving the active member information due to eligible or non-eligible jobholder date (see E2 on page 97).

CE_flag Y/N


continued...


3.3 Calculation routines

Note 1: Throughout these data items the deferral date (the end of the postponement period) corresponds to Worker postponement + one day or Eligible jobholder postponement + one day.

System derived data



E1 Automatic enrolment deadline

Following automatic enrolment and opt in, the employer must take three administrative steps no later than one calendar month after the automatic enrolment date or enrolment date. The employer must:

A. Complete whatever administration is necessary to ensure the jobholder becomes an active member of an automatic enrolment pension scheme (occupational pension scheme) (see D5 on page 85) or ensure the pension provider has issued the terms and conditions (contract based pension scheme) (see D4 on page 85)

B. Provide the jobholder with specified automatic enrolment information (see D3 on page 84)

C. Provide the pension scheme with specified information about the jobholder.

The automatic enrolment deadline is defined as:

AE_due = [AE_date + one month] OR [OE_Date + one month]

The payroll-driven content of the information described at B and C is found at rows 1 and 2 of table 2 in Annex A on page 106.

NB1: Where an employer is using a worker or eligible jobholder postponement period they are permitted to provide the information at (B) above at the same time that they provide a postponement period notice.



continued...




NB2: Employers must complete the administrative steps for automatic enrolment within one calendar month. Where the pay reference period in use is longer than one calendar month and pay is not calculated within one month of the start of the pay reference period, the employer may need to estimate which workers will become eligible for automatic enrolment and undertake the necessary administrative steps for automatic enrolment within the first calendar month in advance of performing the payroll calculations that will confirm eligibility. In such circumstances employers may wish to make cautious estimates in order to ensure that they do not fail to meet the legal requirements. At the point that payroll is run and eligibility is confirmed the employer can address any cases where a worker turns out to have been mistakenly estimated to be eligible by ensuring that no deduction of pensions contributions is taken and that the worker and pension scheme are informed of the error.

E2 Active member information due to a jobholder

If on the staging date an eligible jobholder or a non-eligible jobholder is already a member of a qualifying pension scheme, the employer is obliged to provide them with specified information.

The employer is also obliged to provide this information to any worker who becomes a jobholder and an active member of a qualifying scheme after the employer’s staging date.

The information must be provided to jobholders. Part 3 includes separate calculation routines for eligible jobholder status and non-eligible jobholder status in C10 and C12. Both of these are jobholders.

The employer is only obliged to provide this information once – per worker, per employment. The deadline for providing this information is:

Memb_QPS_info_due = the earlier of [[EJ_date + two months] OR [JH_date + two months]]IF[Memb_QPS_date ≤ EJ_date AND AE_date <> EJ_date] OR [AE_date = EJ_date AND CE_flag = Y] AND Postpone_A_info_giv is not present AND Memb_QPS_info_giv is not presentOR [Memb_QPS_date ≤ JH_date

Memb_QPS_info_due

Date




E2 continued...

ANDOE_date <> JH_date] AND Postpone_A_info_giv is not present AND Memb_QPS_info_giv is not present.

The payroll-driven content of the information is found at row 3 in Annex A on page 106.

E3 Opt-out period start

Following automatic enrolment or opt in, a jobholder may opt out of membership of a qualifying pension scheme and receive a full refund of any contributions deducted.

In order to opt out, the jobholder must provide a signed, valid opt-out notice to their employer within the specified opt-out period. The rule defining the start of the opt-out period varies depending on whether the jobholder was automatically enrolled into an occupational or a contract-based pension scheme.

IF WPP_flag = N, then OptOut_start = the later of [AE_info_ giv OR Active_memb_complete]

IF WPP_flag = Y, then OptOut_start = the later of [AE_info_giv OR WPP_info_date]

OptOut_start Date

NB1: Under the legislation, the jobholder must obtain the opt-out notice from the pension scheme into which they have been automatically enrolled. This means that the employer must not provide the jobholder with an opt-out directly, unless the employer also administers its own pension scheme.

E4 Opt-out period end

The opt-out period lasts one calendar month. There is one exception. If the jobholder submits an invalid opt-out notice, the opt-out period is extended to be six weeks.

The end of the opt-out period is defined as follows: Where Invalid_OptOut_rec = N, OptOut_end = [OptOut_start + one month]

Where Invalid_OptOut_rec = Y, OptOut_end = [OptOut_start + six weeks]

(When adding six weeks, count forward 42 days, OptOut_start would be day one. OptOut_end would be the 42nd day).

OptOut_end Date



continued...




E5 Right to opt in information due to jobholder

The employer is obliged to provide jobholders with information that explains their right to opt in to an automatic enrolment pension scheme. This information must be provided no later than one month after the worker becomes a jobholder with the right to opt in for the first time.

The employer is only obliged to provide this information once – per worker, per employment.

The information must be provided to jobholders. Part 3 includes separate calculation routines for eligible jobholder status and non-eligible jobholder status in C10 on page 58 and C12 on page 60. Both of these are jobholders.

The information must be provided no later than one month of the right first applying. For any worker who on the staging date is already a member of a qualifying scheme the right will first apply, if they cease active membership, on the first occasion they become a jobholder (eligible or non-eligible) after membership has ceased.

For any eligible jobholder who is automatically enrolled and then ceases membership after the opt-out period the right will first apply, if they cease active membership, on the first occasion they become a jobholder (eligible or non-eligible) after membership has ceased.

For the exceptions to having to issue the information within one month of the right first applying see D11 on page 91. The deadline for providing this information is:

OptIn_info_due = [JH date + one month]IF JH_flag = Y AND Memb_QPS_flag = N AND JH_date ≥ PRP_start AND ≤ PRP_end AND Postpone_A_info_giv is not present AND Postpone_B_info_giv is not present AND Postpone_tailor_JH_info_giv is not present AND DB_phasing_info_giv is not present

OptIn_info_due

Date






E5 continued...

AND OptIn_info_giv is not present]OROptIn_info_due = [EJ date + one month] IF EJ_flag = Y ANDMemb_QPS_flag = N AND Wor_postpone_flag = Y ANDPostpone_A_info_giv is not present AND Postpone_B_info_giv is not present AND Postpone_tailor_JH_info_giv is not present AND DB_phasing_info_giv is not present AND OptIn_info_giv is not present]OROptIn_info_due = [End_pension_date + one day + one month]IF [JH_flag = Y OR EJ_flag = Y]AND Memb_QPS_flag = N AND Memb_QPS_date is presentAND OptOut_date is not present] AND Postpone_A_info_giv is not present AND Postpone_B_info_giv is not present ANDPostpone_tailor_JH_info_giv is not present AND DB_phasing_info_giv is not present AND OptIn_info_giv is not present]

The payroll-driven content of the information is found at row 2 at Annex A on page 106.



continued...




NB1: We do not explicitly consider here whether employment end or the 75th birthday have passed on the date the right to opt in first arises. This is because the calculation routines in C10 on page 58 and C12 on page 60 for eligible jobholder status and non-eligible jobholder status will only run if employment end (B16 on page 52) or 75 date (C4 on page 55) is not passed on the assessment date.

E6 Right to join information due to worker

The employer is obliged to provide entitled workers, who are not already contributing to a workplace pension scheme, with information that explains their right to join a pension scheme (there is no duty on the employer to provide a qualifying pension scheme with employer contributions for such workers). This information must be provided within one month of a person becoming an entitled worker for that employer.

The employer is only obliged to provide this information once – per worker, per employment.

The information must be provided no later than one month of the right first applying. For any worker who on the staging date is already a member of a qualifying scheme the right will first apply, if they cease active membership, on the first occasion they become an entitled worker after membership has ceased.For any eligible jobholder who is automatically enrolled and then ceases membership after the opt-out period the right will first apply, if they cease active membership, on the first occasion they become an entitled worker after membership has ceased. The deadline for providing this information is:

Notice_join_info_due = [Wor date + one month]IF Wor_flag = Y AND Memb_QPS_flag = N AND Wor_date ≥ PRP_start AND ≤ PRP_end ANDPostpone_A_info_giv is not present AND Postpone_B_info_giv is not present ANDPostpone_tailor_wor_info_giv is not present AND Notice_join_info_giv is not present

Notice_join_info_due

Date





E6 continued...

ORNotice_join_info_due = [End_pension_date + one day + one monthIF Wor_flag = Y AND Memb_QPS = N AND Memb_QPS_date is present AND Postpone_A_info_giv is not present AND Postpone_B_info_giv is not present AND Postpone_tailor_wor_info_giv is not present AND Notice_join_info_giv is not present

The payroll-driven content of the information is found at row 5 in Annex A on page 106.

NB1: We do not explicitly consider here whether employment end or the 75th birthday have passed on the date the right to opt in first arises. This is because the calculation routine in C13 on page 63 for entitled worker status will only run if employment end (B16 on page 52) or 75 date (C4 on page 55) is not passed on the assessment date.

E7 The Pensions Regulator registration due

Shortly after they become subject to the duties for the first time, the employer is obliged to submit information to The Pensions Regulator giving details of how they have discharged their duties. This is called registration.

The deadline for the employer to register is determined as follows:

TPR_reg_due = [Duty_start + four calendar months]

Where the staging period has ended the deadline for the employer to register is four months from the day that PAYE income first becomes payable in respect of any worker.

TPR_reg_due Date



continued...




E8 Postponement period notice due

Where the employer wishes to use either the worker postponement period or the eligible jobholder postponement period, they must provide the worker with a postponement period notice. The regulations set out a number of mandatory pieces of information that must be included in the various options for the notice (see D7 to D10 for a description of the different options for the postponement notice). The deadline for providing this information is either:

[The latest of [Duty_start + one month] OR [Employment_start + one month] OR [DB_phasing_end + one day + one month]IF Wor_postpone_flag = Y] OR [The latest of [EJ_date + one month] OR [EJ_repeat_date + one month] IF EJ_postpone_flag = Y]

The payroll-driven content of the postponement period notice options is found at rows 6-9 in Annex A on page 106.

Postpone_info_due

Date

E9 DB phasing information due to eligible jobholder

Where the employer wishes to use the transitional period for DB and Hybrid pension schemes for an eligible jobholder at their first enrolment date, they must provide the worker with a notice. The regulations set out a number of mandatory pieces of information that must be included in the various options for the notice.

The deadline for providing this information is:

[First_enrolment_date + one month]

The payroll-driven content of the notice is found at row 10 in Annex A on page 107.

DB_phasing_info_due

Y/N



Report capabilities

Reports listing workers with: For these workers the employer must:

1 Where Wor_postpone_flag = Y for the first time Provide the worker (irrespective of worker, jobholder or eligible jobholder status) with the postponement period notice (see D6-8 on pages 86-88 and E8 on page 103)

2 Where EJ_postpone_flag turns from N to Y Provide the eligible jobholder with the postponement period notice (see D9 on page 89 and E8 on page 103)

3 Memb_QPS_info_due is present for the first time Provide the jobholder with information about the qualifying pension scheme of which they are an active member (see E2 on page 97)

4 OptIn_info_due is present for the first time Provide the jobholder within specified timescales with information about the right to opt in to an automatic enrolment scheme (see E5 on page 99)

5 Notice_join_info_due is present for the first time Provide the entitled worker within specified timescales with information about the right to join a scheme (see E6 on page 101)

6 DB_phasing_info_due is present for the first time Provide the eligible jobholder within specified timescales with information about the DB/Hybrid transitional period (see E9 on page 103)

3.4 Report capabilities

190. Employers may require their wider business software systems to produce reports listing certain categories of workers. These output/reports from the system will be needed as inputs/prompts for the employer to take further action in order to comply with remaining aspects of the duties around the provision of information.



3.5 Record-keeping requirements

191. The employer is obliged to keep a number of records in relation to their compliance for six years and may authorise a third party to keep, preserve or provide the records on their behalf. Data generated by payroll systems using the calculations in this section that may support the employer in meeting the record-keeping requirements follows:

192. The only required records that are directly generated by the data and calculations in this section are:

• Postpone_A_info_giv where present

• Postpone_B_info_giv where present

• Postpone_tailor_JH_info_giv where present

• Postpone_tailor_wor_info_giv where present

193. Wherever any of the above are present the employer is also obliged to keep a record of the name and National Insurance number of the worker to whom the record relates, ie the worker to whom the postponement period notice was given.

194. In addition, there are a number of records that an employer is obliged to keep that could be archived within an employer’s software system:

A. Each opt-in notice submitted by any jobholder

B. Each joining notice submitted by any worker

C. Each opt-out notice submitted by any jobholder (NB records of opt-out notices are only obliged to be kept for four years). Records A to C (shown above) may be submitted to regulator in paper or electronic format.



Annex A: Data driven from software systems for inclusion in information packages

The employer is obliged to provide specified groups of workers with information about how they are affected by the duties. This list only covers the data items for inclusion in the information packages that can be supported by software systems. It does not provide an exhaustive list of the information items. More information about duties can be found on the regulator’s website in the workplace pension reforms Detailed guidance: Information to workers resource – www.thepensionsregulator.gov.uk/docs/Pensions-reform- resource-information-to-workers.pdf. The DWP have developed letter templates for each information package for employers to use. These are available on our website at: www.thepensionsregulator.gov.uk/employers/writing-to-workers-about-automatic-enrolment.


Row Information package Systems-driven data items for inclusion

1 Automatic enrolment information(see E1 on page 96)

• Latest instance of Cont_date (see C16 on page 67)

• OptOut_start (if available)

• OptOut_end (if available)

2 Jobholder information to qualifying pension scheme (see E5 on page 99)

• Name

• DoB

• Postal residential address

• Gender

• Latest instance of Cont_date (see C16 on page 67)

• National Insurance Number

• Sum_PRP in current period (ie as at last payroll run date) (see C7 on page 57)*

• Postal work address*

• Individual work email address (where this exists)*

• Personal email address (where available)*

3 Active member information (see E2 on page 97) No systems-driven data is required for this information package

4 Opt in information (see E5 on page 99) No systems-driven data is required for this information package

5 Right to join information (see E6 on page 101) No systems-driven data is required for this information package

6 Postponement period General Notice A (see D7 on page 87)

Latest instance of [Wor_postpone_end + one day]

7 Postponement period General Notice B(see D8 on page 88)

Latest occurring value held for [Wor_postpone_end + one day]

8 Postponement period Tailored for Jobholder Notice (see D9 on page 89)

Latest occurring value held for EITHER [Wor_postpone_end + one day] OR [EJ_postpone_end + one day]

9 Postponement Period Tailored Notice for Entitled Worker (see D10 on page 90)

Latest occurring value held for [Wor_postpone_end + one day]

10 DB Phasing information (see D11 on page 91) No systems-driven data is required for this information package

NB: For information packages at rows 1, 2, 4, 5, 6, 7, and 8, the employer is also obliged to include information about the worker and employer pension contribution rates. The employer is able to provide the percentage rates or the cash values of contributions. Depending on how the employer wishes to discharge this aspect of the information duty, there may be a further role for payroll to produce supporting data.

* These data items do not need to be provided if the pension scheme has told the employer they do not need them.

Annex A: Data driven from software systems for inclusion in information packages


Annex B: Changes made between v3.1 and v4.0 of this guidance

This version (v4.0) of the Software Guide has been updated as a result of feedback and to further align this guidance with the detailed guidance for employers. We understand that some developers use the detailed guidance for employers for guidance on the new duties and so have aligned in terminology and structure to aid understanding.

The front of the document has been restructured to align with the format of the detailed guidance – ‘note to readers’ and ‘future versions of this guidance’ moving to become ‘About this guidance’. The information about the duties has been moved to form section 1 of this guidance.

Page/Row

Nature of change (eg to value, description)

Change description

A1 Change to Description of data

Removal of wording about the DWP’s consultation on staging dates for employers with less than 250 persons in their PAYE scheme. This consultation has been completed and the new regulations have been made. Clarification added that an employer’s staging date cannot be moved back.


Clarification that the thresholds must be reviewed annually and may or may not be changed. If changes are to be made, the DWP intend to make the announcement in November each year. Removal of footnote caveating that the thresholds were subject to Parliamentary approval as this has been obtained.





A5 Change to value and description of data

Consultation on the staging profile has been completed and the regulations have now been made. The length of the transitional period has been confirmed as finishing on 30 September 2017.

Background on the assessment process which underpins the key concepts required in understanding the core functionality has been added to section 2. This includes the content on contributions that was section 3 in v3.1. Content on the application of the assessment process to common situations that we are asked about eg the handling of errors has also been added.

Navigation and explanation of the structure has been strengthened.

The main changes in the technical content are listed in the following table.


Page/Row


Change description

B3 Change to Description of data

NB1 added to clarify when the value in this data item is to be overwritten.

B3A New data item added New data item added for the date existing qualifying pension scheme joined. This is to capture those workers who are already active members of a qualifying scheme with the employer immediately before the employer’s staging date. If any of these are eligible jobholders on the staging date and active members of a qualifying scheme with the employer, the employer will not have an automatic enrolment duty but will have to provide information.


Clarification added to reflect that worker postponement can be combined with the transitional period for DB and Hybrid pension schemes for those workers that meet the conditions for DB Phasing.


As a result of the fact that postponement and the transitional period for DB and Hybrid pension schemes can be combined for those workers that meet the conditions for DB Phasing, clarification added to the rule that worker postponement can only be used once. In rare circumstances it may be possible where the transitional period for DB and Hybrid schemes is being used for worker postponement to be used more than once. Deferral date has been added to the description of postponement for consistency with the detailed guidance for employers.


Clarification added to reflect that worker postponement can be combined with the transitional period for DB and Hybrid pension schemes for those workers that meet the conditions for DB Phasing.

B9 Removal of data item Any worker (aged 16 or more and less than 75) under the new legislation can ask their employer to be made an active member of a pension scheme. Workers with an eligible jobholder or non-eligible jobholder status, who are not already members of a qualifying pension scheme regardless of whether they are subject to a postponement period, are permitted to give notice to the employer that they wish to opt in to a qualifying pension scheme. A worker who has an entitled worker status has the right to join a pension scheme.

Following receipt of a valid notice, the employer needs to determine whether the worker is a jobholder and the notice is therefore an opt-in notice or whether the worker is an entitled worker and the notice is a therefore a joining notice. This is key as it determines the action the employer needs to take. Even if the worker has completed a standard opt-in or joining notice or indicated that it is one or the other the employer should validate that it is the correct notice.

A new data item – date pension notice received – has been added at B17 to reflect that the employer should check the workers’ status at the point in time they receive a notice to determine or validate that the notice is an opt-in notice or a joining notice. As a result B9 has been removed.


continued...


Page/Row


Change description

B17 New data item added See B9 above.

C5 Change to Description of data

Alignment with detailed guidance for employers.


Further explanation of the meaning of ‘payable’ added.


Further explanation of ‘assessment date’ added and when the assessment of a worker ceases.

C11 Change to value and description of data

C11 is amended to align with the changes made to C10 in v3.1 of the guidance in April 2012. Further explanation of ‘assessment date’ added and when the assessment of a worker ceases.

C11A Change to value and description of data

Provided on the deferral date a worker is not an eligible jobholder an employer may use EJ postponement or repeat the use of EJ postponement on the next occasion the worker becomes an eligible jobholder. Therefore the employer needs to know the outcome of the assessment on the deferral date to determine whether automatic enrolment must be completed or whether EJ postponement can be used. A new data item – deferral date status – has been added at C30 to record this outcome. C11A has been amended to take account of this new data item.



C12A Change to value and description of data

C12A is amended to align with the changes made to C12 in v3.1 of the guidance in April 2012. Further explanation of ‘assessment date’ added and when the assessment of a worker ceases.



C13A New data item added Each jobholder flag (C10 – eligible jobholder and C12 – non-eligible jobholder) has a corresponding date item for when the status is first met. Eg C11 Date on which a worker first becomes an eligible jobholder and C12A Date on which a worker first becomes an eligible jobholder. This data item has been added to ensure consistency with that approach for the third category of worker – entitled worker.


C14 is amended to align with the changes made to C10 in v3.1 of the guidance in April 2012.


Alignment with detailed guidance for employers.


Further explanation added about the definition of pensionable pay in a pension scheme.



Page/Row Nature of change (eg to value, description)

Change description

C30 New data item added See C11A.

C31 New data item added See B9.

C32 New data item added This data item is need for C15 which identifies the enrolment date. The identification of the enrolment date starts on the first day of the pay reference period after the pension notice was received (and the worker was a jobholder) provided the pension notice was received before payroll arrangements closed. If it was received after payroll arrangements had closed then the identification of the enrolment dates starts on the first day of the second pay reference period following the one in which the pension notice was received. This data item sets the start date for the C15 calculation of the enrolment date.

Page 97 – new section Report capabilities

Moved from Annex B Reports that may be run on the outcomes of the calculation routines in the core functionality section. Further details of the type of information that may be included added.

Page 98, 5b registration information

Change to value and description of data

Updated part 5. Registration information in v 3.1 with the report capabilities that may be run on the outcomes of the calculation routines in the core functionality section to support an employer in completing registration.

D11 New data item added To complete the information requirements a new data item about the information to be provided to a jobholder about the right to opt in has been added.

D12 New data item added To complete the information requirements a new data item about the information to be provided to an entitled worker about the right to join has been added.

D13 New data item added To complete the information requirements a new data item about the information to be issued to an eligible jobholder when the employer has decided to use the transitional period for DB and Hybrid pension schemes has been added.

D14 New data item added To complete the information requirements a new data item about the information to be provided to a jobholder who is already an active member of a qualifying scheme with the employer has been added.

D15 New data item added The deadline by which a notice to a worker about the DB and Hybrid transitional period must be issued is set be reference to the employer’s first enrolment date. New data item added to capture that date.


continued...


Page/Row Nature of change (eg to value, description)

Change description

D16 New data item added The employer is required to provide information to a worker on the first occasion they become a jobholder and an active member of a qualifying scheme. It is possible for the first occasion a worker becomes a jobholder and an active member of a QPS to be by virtue of automatic enrolment or opt in. Where this is the case the employer is not required to provide this information. It is also possible that the first occasion a worker becomes a jobholder and an active member of QPS is by virtue of the employer using contractual enrolment to establish active membership outside of the new duties. In this case the information does need to be provided. This data item identifies where active membership is by virtue of contractual relationship for the calculation routine in E2 for identifying when the requirement to issue the information to a jobholder about the scheme they are already an active member of is triggered.

E2 New value added Updated to reflect the update requirements in the legislation.



E9 New data item added To complete the information requirements a new routine about the information to be issued to an eligible jobholder when the employer has decided to use the transitional period for DB and Hybrid pension schemes has been added.

E10 New data item added Both the information that must be provided to active members of a QPS and about the right to opt in to an automatic enrolment scheme must be provided to a jobholder. This routine has been added to identify whether a worker is a jobholder.


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