How to Manage Pension Automatic Enrolment

The Pension Automatic Enrolment rules requires that payees' ages and qualifying earnings are assessed to determine their eligibility status for automatic enrolment.  The eligibility statuses used are:

There are other statuses which are used by FastTrack360 to manage the automation of pension automatic enrolment:

FastTrack360 also holds an enrolment status as well as an eligibility status.  An enrolment status indicates identifies if a payee is already in an active scheme or if they are in a re-enrolment process.

The Automatic Assessment of Eligibility for Auto Enrolment

FastTrack360 will automatically determine the above statuses and manage the auto enrolment process.  It will perform the following actions with the pay batch process:

• At the Auto Enrolment stage, it will determine the eligibility category of the payee as well as determine re-enrolments, enrolments, opt outs and postponements.

  • It will assess a payee's eligibility based on their qualifying earnings for the pay period (not just for the pay batch if there are multiple pay batches for the same payee in the same period) and their age as at the end of the pay period.

  • Re-enrolments will be based on whether the Pay Company Re-enrolment date is within the pay period.

• At the Gross Deduction/Net Deduction stages it will determine the pension contributions of the scheme assigned.

• At the Wage Cost stage, it will determine the employer contributions of the scheme assigned.

• At Pay Batch close stage, it will

  • inject the pension scheme into the Payee Pension Membership for new memberships.

  • Inject the postponement dates it has determined in the Payee Pension Membership

  • Display the date of pay period in which a refund was given in the Payee Pension Membership.

  • Apply a withdraw date if the auto enrolment process was overridden or if in a second pay batch a recovery meant the payee no longer was eligible it would end the scheme.

  • Update the YTD pension figures.

  • Update the FPS data for pension contributions.

When a Payee is Eligible for Automatic Enrolment

If the system determines if the payee is eligible for automatic enrolment, the enrolment status will be displayed as Auto Enrolled and the eligibility category will be Eligible.  In the next pay batch or period, the enrolment status will then change to show Active Scheme.  This is so users can identify in which pay batch a payee was auto enrolled.  

In future pay batches, if the payee does not have any pensionable earnings, their eligibility category will remain as Eligible as this indicates that they have been auto enrolled.  Once they are auto enrolled, it is the pension scheme rules that determine the contribution.

How to Manually Enrol a Payee

If a payee has not been automatically enrolled and you require the payee to be automatically enrolled, this can be applied manually.  This can only be applied manually if the payee's enrolment status is Not Eligible.  If they are of any other status, their payee record will need updating:

• If the enrolment status is Postponed, you will need to amend the postponement end date in the payee record to the last pay period end date.

• If the enrolment status is Exception, you will need to remove the Exception flag in the payee record.

• If the enrolment status is Active Scheme, they cannot be automatically enrolled again.  If a further scheme is required, you will need to add the scheme in the payee record.

• If the enrolment status is Opt Out or Withdrawn, you will need to add the scheme in the payee record as it will be an opt in.

• If the enrolment status is Not Eligible, the user can apply an auto enrolment scheme in the pay process and to follow the procedure below.

How to Override an Automatic Enrolment

If a payee has been auto enrolled in a pay batch and you did not want the payee to be auto enrolled, follow the procedure below.

How to Override an Automatic Enroment

How to Override an Automatic Enroment
	On the Pay Wizard - Auto Enrolment Stage, against the relevant payee record, click the Edit button to open the record.	Open
2.	Check the Enrolment Override check box.
3.	Type the reason for the override in Enrolment Override Reason.
4.	Click Save. The enrolment status will be changed to Withdrawn. At Pay Batch Close, the existing scheme on the payee record will have a withdrawn date entered and will also display that an override had been applied.

Multiple Pay Batches Affecting Qualifying Earnings and Eligibility for Auto Enrolment

The assessment for automatic enrolment is based on qualifying earnings for the whole pay period.  If a payee has more than 1 pay batch within a pay period, the system will sum all the earnings in the pay period to determine eligibility.  Therefore, if additional pay is received in a second pay batch that took the payee over the trigger threshold, they will be auto enrolled and the pension contribution will be based on all earnings received in that pay period.

Conversely, if a payee's first pay batch meant that they were auto enrolled but then had a negative second pay batch which mean their qualifying earnings in the whole pay period would fall below the trigger threshold, they would be automatically withdrawn from the pension scheme and the pension contributions would be refunded.

Postponements

Depending on the configuration for postponements, the system will automatically determine if a payee's worker postponement should commence, end or if an eligible jobholder postponement is activated. 

Worker Postponement

A payee can be postponed for up to 3 months from when they start with your organisation or from when they first become eligible for auto enrolment (this will be based on your configuration in Pay Company > Pension Automatic Enrolment).  The start and end dates of the postponement period will the start and end dates of pay periods and will not be part period based.  The system will automatically determine these dates.  If you wish to override the end date of postponement, this can be applied against the payee postponement section in the payee screen.

Eligible Jobholder Postponement

Eligible Jobholder Postponements are to assist organisations who have workers who have fluctuating earnings each period such as seasonal workers.  Further postponement periods can be applied after a worker postponement has ended.  These postponements can only be applied when the payee's eligibility category is Non Eligible Jobholder in the period straight after the worker postponement has ended.  When they next become eligible, the Eligible Jobholder Postponement  will automatically be applied. 

For example, assume the following:

• Pay frequency is monthly 

• Postponement periods are 2 months

• Eligible jobholder postponement is activated

If the eligible jobholder postponement was not activated, the payee would be auto enrolled sooner.

• Pay frequency is monthly 

• Postponement periods are 2 months

• Eligible jobholder postponement is not activated

So, in the above example the payee would be auto enrolled a lot sooner because the eligible jobholder postponement was not activated.

Opt Outs

When the Opt Out indicator is set along with the Refund Contributions in the Payee Membership, the system will display the enrolment status of Opt Out.  This indicates that the payee has opted out in that pay period.  In the following pay period, the enrolment status will change to Withdrawn.

Re-enrolments

Re-enrolments occur every 3 years from the staging date of the employer.  Where payees are no longer in a pension scheme (whether an opt out or withdrawn) if their withdraw date is greater than 365 days from the re-enrolment date, the system will automatically re-enrol the payees into a pension scheme.

Reporting

Calculation Report

Where a payee has had contributions spanning 2 tax years because they were auto enrolled near the end of the tax year, only the current tax year figures will be automatically generated. The previous year contributions will need to be added manually against a different deduction code in net deductions.  You are alerted to this via the calculation report.  Please refer to Viewing and Editing Year to Date Figures for guidance on refunding prior tax year contributions.

Example -  A refund spanning 2 tax years

Pension Auto Enrolment Qualifying Earnings Report

This report is available at the Auto Enrolment stage to show payee enrolment and eligibility status and their qualifying earnings for the relevant pay batch.