042/2013 – Decision to delay the staging date for automatic enrolment of pensions for the new employer, North Yorkshire Police and Crime Commissioner – 22 May 2013

Executive Summary and recommendation:

As a result of changes to the Pensions Act 2008, North Yorkshire Police is required by law to enrol certain workers into a workplace pension and contribute towards it. This is known as automatic enrolment (or “auto-enrolment”). This includes police staff and police officers. The date for the auto-enrolment to commence is known as the ‘staging date’. Prior to the election of the Police and Crime Commissioner for North Yorkshire (NYPCC), North Yorkshire Police were informed by the Pensions Regulator (referred to as the Regulator in this document) that its staging date was 1 August 2013. Since the election of the Police & Crime Commissioner the employer status has changed and the Pensions Regulator has written to North Yorkshire Police with a new staging date of 1 May 2017 for both police officers and police staff.

The recommendation is:

• delay the auto-enrolment staging date for NYPCC to 1 May 2017

Police and Crime Commissioner decision:

Approved

Signature Date 22 May 2013
Title Police & Crime Commissioner for North Yorkshire

Part 1 – Unrestricted facts and advice to the PCC

Introduction and background

The text below is a copy of the notification of the change of auto-enrolment staging date for the employer North Yorkshire Police and Crime Commissioner:

“As you may be aware, the law on workplace pensions has changed and you will have new employer duties; set out in the Pensions Act 2008. The law requires all UK employers to enrol certain workers into a workplace pension and contribute towards it. Each employer is allocated a date from when the new automatic enrolment duties will apply to them, known as their “staging date”.

Your staging date is based on the number of persons in your largest pay as you earn (PAYE) scheme as at the 1 April 2012. This data was supplied to the Regulator by HMRC, however, from recent communication with other Police Authorities (now Police and Crime Commissioners) it is our understanding that all of your workers are no longer employed by North Yorkshire Police and have been transferred to the Police and Crime Commissioner for North Yorkshire with effect from 22 November 2012. It is clear from section 1(9) of the Police Reform and Social Responsibility Act 2011 that the Police Authorities were abolished with effect from 22 November 2012.

The regulator’s view therefore is that the Police and Crime Commissioner for North Yorkshire became a new employer for the purposes of the employer duties under the Pensions Act 2008 with effect from 22 November 2012 (after 1 April 2012). The Employers’ Duties (Implementation) Regulations 2010 provide that staging dates for new employers are set by reference to when PAYE income is first payable in respect of any worker. For example new employers with PAYE income first payable between 1 April 2012 and 31 March 2013 will have a staging date of 1 May 2017. As the PCC became a new employer with effect from 22 November 2012, the regulator understands that their first PAYE income will be payable between 1 April 2012 and 31 March 2013. Accordingly, the PCC will have a staging date of 1 May 2017.

It is open to the PCC to choose to bring forward their staging date, however, the Regulator must be notified a least one calendar month ahead of that new chosen staging date. More information on bringing forward your staging date can be found at www.thepensionsregulator.gov.uk/employers/bringing-staging-date-forward.aspx

Please note that this staging date supersedes any previous staging date provided by the Regulator. If the date PAYE income is first payable in respect of any of your workers does not fall between the dates set out above, please contact us at your earliest convenience to provide us with correct information.
If you need any further information about automatic enrolment, please contact us (0845 600 1011) or visit our website at http://www.thepensionsregulator.gov.uk/automatic-enrolment.aspx

Regards

Heather Prescott

Industry Liaison Manager, Workplace Pension Reform ”

Matters for consideration

The Regulator provides for employers to elect to bring forward their staging date from that notified to them. The employer must give at least one month calendar notice to the Regulator should they wish to change the staging date.

A delay to the staging date would assist in managing the volume and timing of work currently being undertaken in the area of employee terms and conditions with specific reference to the changes resulting from the Winsor II review and recently released determinations. A delay in the staging date would also allow North Yorkshire Police resource to focus on embedding these changes into business as usual activity.

The determination of ownership of resources under Stage 2 Transfer will also need to be considered in respect of the staging dates. Any change to the current status will have an impact on resourcing and systems in North Yorkshire Police and delaying the staging date would allow for any changes to be planned and incorporated prior to the auto-enrolment activity.

Some preparatory work has already been progressed in respect of the 1 August 2013 staging date. There is still work outstanding for completion in order to finalise the move to auto-enrolment and further demand is being placed on existing resources to implement the changes from Winsor II.
In summary, delaying the staging date will allow North Yorkshire Police to prepare and align its employee terms and conditions, structure and business processes enabling a planned, efficient and cohesive approach to auto-enrolment.

Other options considered, if any

The options considered are:

• Continue with the staging date of 1 August 2013
• Delay the staging date to 1 May 2017

Contribution to Police and Crime Plan outcomes

The recommendation has a neutral impact on the Police and Crime Plan outcomes.

Consultations carried out

Consultation has taken place with colleagues representing the following professions: Legal Services; Finance; Human Resources.

Financial Implications/Value for money

Auto-enrolment could be expected to lead to an increase in the level of pension scheme membership and therefore cost to the NYPCC. However, the budgets included in the MTFP are based on standard costs for officers and staff and assume that all staff and the majority of officers will be in the appropriate pension scheme. Therefore, if the start of auto-enrolment is delayed, it would be likely that the budget would show an underspend in the intervening period, although this is unlikely to be significant.

Legal ImplicationsEquality Implications

An equality assessment has been completed and there are no implications in respect of the Equality Act. All employees are automatically entered into either the Police Pension Scheme or the Local Government Pension Scheme upon commencement of employment after which it is incumbent upon the individual to determine whether or not they wish to remain in the pension scheme.