Mergers and restructures - the impact of pension auto-enrolment legislation

Written by: Alison Barlow

Mergers and restructures - the impact of pension auto-enrolment legislationI’ve written before on this blog about auto-enrolment pension legislation and why it’s so complex for the hospitality sector. There’s one particular element, however, that many hospitality organisations may not fully understand the impact of.

From 1st October this year, all new companies will not be issued a staging date. Instead, their legal duties will start on the day that their first worker is employed. These new employers will still be able to administer the 3-month postponement period in line with current legislation, as long as they write to new employees within 6 weeks of their start date to let them know. For most hospitality organisations this wouldn’t seem too much of an issue. The company exists already, so this wouldn’t apply to them.

Where the issue becomes more complex is in the realm of mergers and restructures. If two companies merged after 1st April 2012, and both employers remained as legal entities in their own right and continued to be the employer for the respective workers, the staging dates would be the same as they were before. However, if a new company is created as a result of the merger, they will now be treated as a new employer and will therefore have immediate auto-enrolment duties.

Any hospitality business planning a merger or any restructuring that involves workers changing employers, must therefore take into account the effects of different staging dates on their benefits policies, administration processes and staff communications. Essentially, after 1st October 2017, auto-enrolment should be included as part of the standard process when setting up a new employee.

If you take on your first member of staff between 1st July 2017 and 30th September 2017 your staging date will be 1st February 2018.

To find out more about pensions auto-enrolment for hospitality organisations and what you need to do when, register for our upcoming webinar.

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