What are the auto-enrolment duties for enrolling directors?

According to The Pensions Regulator, an employer has the option to enrol a director into a workplace pension if they’re eligible for auto-enrolment. But they don’t have to.

The regulator’s definition of a director

A director refers to anyone who holds office as a director. Under the Companies Act 2006, a person is viewed as a director if:

  • they’ve been formally appointed
  • they’re in a decision-making role which relates to the governance of a company as a director (who may not necessarily be formally appointed).

If a person just has ‘director’ in their job title, this wouldn’t count.

A director would be viewed as eligible for auto-enrolment if:

  • they’ve an employment contract with the company (this can be a written, verbal or implied contract)
  • there’s at least one other person who has an employment contract with the company.

If an employer chooses to not enrol a director, they’ll still need to communicate to them and complete their declaration of compliance.

A director still has the right to opt in or join a workplace pension. If they make this request, the employer must enrol them (unless they’re in their notice period). If a director is enrolled, the employer’s auto-enrolment duties apply.

For more information about enrolling directors into a workplace pension, visit The Pensions Regulator’s website.

 

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