Photo: Creative Commons, Premier Financial Planning IFA Bath
Plan your auto enrolment
The Pensions Regulator recognises that the arts and entertainment industry faces particular challenges with pensions auto-enrolment but urges the industry to act now.
Pensions auto-enrolment is approaching, and the issues facing the arts and entertainment industry were highlighted at an event organised by the Pensions Regulator in September. The nature of this sector means that many workers are employed on short-term contracts, work sporadically, seasonally or often in one-off instances charging a one-off fee. This means that many workers have fluctuating, irregular earnings. Performers, artists and other staff are also often supplied by agencies, can earn royalty fees and come from overseas.
At the question and answer session, the finance director of a theatre in Exeter employing around 50 people said: “I didn’t know before I came here that I had to automatically enrol temporary staff. I might use a sound engineer for one production and then not use him again for months. These are the sorts of things I need to know about.”
We advise employers to start preparing for automatic enrolment at least six months before their staging date
Another attender from a London theatre employing around 150 workers said: “There are dry spells where we have relatively few staff but when there is a performance the number of staff on our books is quite large. All of them are working on different sorts of contracts for varying hours. It is not just actors and technical staff, it’s also the people who work in the box office and foyer.”
Another theatre owner asked whether he was responsible for assessing agency workers, and the owner of a casting agency asked about workers from abroad: “If I’m hiring actors from South Africa and they are going home again after the work is finished, do I need to automatically enrol them?”
The Pensions Regulator is responsible for maximising employer compliance with automatic enrolment duties. Our aim is to do that through a policy of educate and enable. We have recently refreshed and updated our website to better serve the needs of medium-size and smaller employers and there is plenty of information there which can help to answer the questions above and more.
The first step on the path to automatic enrolment is for employers to ensure they know their staging date. This date is set in law and is the date their automatic enrolment duties are switched on. Employers should find out their staging date by visiting the staging page of our website. The next step is to make a plan. The timeline planner tool on the website will help employers do this. Employers will need to identify a suitable pension scheme and software provider. They should also decide if they need outside help and ensure that their advisers are offering what they need. We advise employers to start preparing for automatic enrolment at least six months before their staging date.
Employers have a duty to automatically enrol all eligible workers, and to identify them they must assess all their workforce, including those with fluctuating earnings. If workers with irregular earnings are paid monthly, they must be reassessed each month. We expect that employers will use automated systems to do this and that is why it is important for them to test their software to ensure it is compatible with existing systems. Our website shows the monthly earnings threshold which triggers auto enrolment. If earnings hit that threshold and if a worker meets all the other eligibility criteria, then the employer has a duty to automatically enrol the worker into a pension scheme and make employer contributions.
Postponement can be useful for those employers who have temporary workers or those with fluctuating earnings. This allows employers to postpone the duty to assess workers for a period of up to three months. Each situation is unique so employers should check our website for more detail. Please also visit our website for guidance on issues such as workers from abroad and agency workers.The regulator will also write to employers at least 12 months before their staging date prompting them to take action. It is important that employers nominate a person to contact.
The key message is that employers must act now. Leaving preparations too late can cause complications, limit choice and ultimately risk non-compliance, which can come at a cost, as the Regulator can take enforcement action against those who do not comply with the employer duties.
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