Pensions Act 2008 – Safeguarding Individuals
30th May, 2012
Since the Pensions Act 2008 received Royal Assent on 26 November 2008, employers have been busy enquiring and preparing for the auto-enrolment duties concerning their employees.
Some employers may believe that if their staging date for auto-enrolment is not for another couple of years that they have no immediate duties under the Pensions Act 2008.
However, under the Pensions Act 2008 there are safeguards to protect jobholders, entitled workers and job applicants by preventing an employer from doing certain acts both: (1) before a person starts working for them; and (2) once that person is a member of a pension scheme with that employer. Employers need to be aware of the following duties which come into force in July 2012, regardless of the number of employees that an employer may have.
1. An employer must not take, or fail to take, any action that results in either the jobholder ceasing to be an active member of a qualifying pension scheme or the scheme of which they are an active member ceasing to be a qualifying scheme (subject to exceptions). If either of the above should happen or if a third party cause any of the above consequences, the employer must enrol the jobholder back into an automatic enrolment scheme.
2. Employers must not treat a worker unfairly or dismiss the worker on grounds related to the employer duties. An example given in The Pensions Regulator’s Detailed Guidance is that an employer cannot deny a worker promotion or other training opportunities because the worker had decided not to opt out of pension scheme membership. Workers can enforce these rights in an employment tribunal.
3. Employers must not take any action for the sole or main purpose of:
– inducing a jobholder to opt out without becoming an active member of a qualifying scheme with effect from the date on which they originally became an active member; or
– inducing a jobholder or an entitled worker to cease active membership of a pension scheme without becoming an active member of another scheme with effect from the day after the original membership ceased.
E+W+S4. During recruitment process, employers must not ask questions or make any statements which state or imply that a job applicant’s success could depend on whether or not they opt out of an automatic enrolment pension scheme. This prohibited recruitment conduct applies to applicants with an immediate right to be automatically enrolled and to all applicants who could become eligible jobholders during their course of their employment.
Employers must ensure that they, along with the relevant members of staff, understand and comply with these duties which come into force in less than 2 months.