Firms not obliged to enrol all eligible overseas staff

Interested stakeholders have issued concerns over whether employers would be forced to auto-enrol staff who lived overseas but worked in the UK.

Adrian Boulding, pensions strategy director at Legal & General, was among a number of stakeholders PW spoke to who were concerned about this issue.

He said: “There is a question of who the regulator for those working in the UK really is. Our preference would be if the member doesn’t reside here, the employer shouldn’t have to pension them.”

Clause 17 in the current pensions bill, however, shows that in some cases it will allow for regulations to exclude certain European qualifying workers.

According to one lawyer’s interpretation, this could apply where the individuals might force a UK scheme to become a cross-border scheme by them enrolling.

The regulations around making a UK scheme into a cross-border scheme are complex, and involve ensuring it replicated the benefit provisions offered by the overseas workers’ home countries.

Richard Lee, partner at Wragge and Co, said the potential number of exclusions was “very limited” but the fact there was a clear focus from the EU on providing local pension provision should prevent any sort of legal challenge.

“The EU doesn’t have harmonisation of monetary systems at the moment, so it is unlikely we’ll see a challenge. But saying that, you can’t discount the possibility of a discrimination charge,” he said.