Our Designated Employee is changing roles, what happens to the pension contributions?
- If a Designated Employee changes role within your organisation, the pension contributions will most likely continue as before however this will depend on what you agree in your Contract of Employment.
- You can change the types of pension scheme you offer within your Contract of Employment, but you would need to be confident that the membership to your pension scheme is not discriminatory. Especially if you specify which schemes certain groups of your workforce can use.
- Offering different schemes or benefits depending on role would be acceptable but you will need to make sure that you comply with the Law, and you aren't in breach of any other legislation by doing it. For example, you may have provided notice in your Contract of Employment that should your Designated Employee work at a junior level, they would be members of one scheme unless they move to a higher pay rate and move to another this would acceptable. However, if you were to do the same with your part time staff and change the scheme should they become full time this would be discriminatory.
- If your Contracts of Employment haven't specified the scheme your Designated Employee will be joining, they will continue in the scheme they chose in their Notice, and you would need to continue making deductions for this immediately, unless they are still subject to a Deferred Enrolment in which case the deductions will commence once they have reached that date. If on changing to a new role you alter their pension scheme a revised Notice will need to be given to them before deductions commence. They will need to be able to choose between your scheme and Your Island Pension (YIP) (if you aren't using YIP) and have the option of not contributing to the pension. If you were to make the pension scheme compulsory in their Contract of Employment on changing roles there would be no need to provide a Notice to them as they wouldn't be able to choose a different pension.
- If your Designated Employee had previously opted out of the pension scheme in their Notice but you wish to make the pension compulsory and specify this in their new Contract of Employment this would be acceptable, and it will be up to the Designated Employee to decide whether they wish to accept the terms and conditions.
Taking on a new worker
- When you take on a new worker you might find it useful to speak to them to find out what pension scheme they are currently in and whether you will be offering them a different scheme or not.
- If you decide to make your pension compulsory in their Contract of Employment you can do this, even if they previously opted out of a pension with another Employer. You will just need to make sure that your pension scheme complies with the Law.
- If you haven't made the pension compulsory in their Contract of Employment you will need to provide your new Designated Employee with the relevant Notice so they can choose the scheme or opt out of the pension.
- You will need to follow the normal process for setting up your new Designated Employee or Employee with your Pension Provider. They may have previously contributed to a scheme with your Pension Provider and if this happens you will need to find out from the Pension Provider whether any additional information is required. For example, if you are using Your Island Pension (YIP) and your Designated Employee or Employee has a pension pot with them, the new contributions can be added to the ones already held within YIP. Other Pension Providers may be able to do the same so you will need to find this out before you set up your Designated Employee or Employee with them. You will still be able to defer your Designated Employee or Employee enrolment should you wish; you will need to provide them with the relevant Notice when they start work.
