NEST Pensions creates overhaul alert for contractual mobile workers
The new rules, which oblige UK employers to enter staff into a formal pension scheme, (NEST Pensions), are being phased in and are expected to include the majority of companies who employ offshore workers by October 2013.
Offshore operators, such as oil firms will face particular challenges linked to the use of contractors and the fact that employees frequently work abroad. Oil and gas companies have been warned that they face stiff penalties if they fail to meet these deadlines.
Questions still remain over the treatment of employees brought into the UK on short assignments and whether they will be required to be auto-enrolled into a NEST pension, the question arising is whether the person is regarded as ‘ordinarily working in the UK’ and does the contract remain with the employer outside the UK. The same questions arise and add to the confusion around the requirements for expats and “rotators” that are sent overseas from the UK.
Historically, as pensions where not supported by such companies for individuals, the standard situation was for UK employers to “buy” their way out of statutory obligations by offering contractual arrangements that were usually more generous than the UK legal pension requirements. However, that may not be a workable option with the new auto-enrolment pension schemes.