A small family business can be confusing when it comes to workplace pensions auto enrolment responsibilities.
Let’s start with the question of the Directors.
If your small family business is a limited company then you are likely to have Company Directors. Under law, Directors have different rights and responsibilities from employees; they may or may not have employment contracts and get employment rights. If they have no contract they are considered ‘Office Holders’ and as such may not be entitled to automatic enrolment into a workplace pension.
You can define whether you, or any of your directors, are also employees by asking the following questions:
- Do they have a contract or service-employment agreement relating to their appointment? YES = EMPLOYEE
- Are their duties minimal? YES = OFFICE HOLDER
- Do they get a salary or any other form of regular payment? YES = EMPLOYEE
- Do they only receive voluntary payment regardless of the work they do? YES = OFFICE HOLDER
- Are they effectively working as an independent office and not under the close supervision or control of the appointing body? YES = OFFICE HOLDER.
If the answer to any of the above was ‘EMPLOYEE’, then you have your answer and must enrol them in a suitable pension!
What about the question of numbers?
So, how many directors do you have – it does matter?
If you are all Company Directors (and not just using the title) the next question is:
a) Do you have employment contracts?
If no one, or only one Director has an employment contract you won’t have any duties to that Director. If you have at least 2 Directors with employment contracts, then the company will have duties to those that do and auto enrolment will be obligatory, even if they opt out again immediately!
If some of you are Directors, and some not, but all have employment contracts, then all must be enrolled.
If, having read this, you would like to speak to a specialist in Workplace Pensions Auto-enrolment please contact us; we will be pleased to help.