Do directors need a workplace pension?
Short answer: sometimes. It depends on whether the director is classed as a member of staff and that comes down to whether they have an employment contract.
Let’s break it down.
You do have pension duties if…
A director has an employment contract and at least one other person at the company does too (this could be another director or a member of staff).
You’ve got multiple directors and no other staff but at least two of those directors have employment contracts. In this case, everyone with a contract counts as staff and you’ll need to follow the auto enrolment rules.
These workers will have to be automatically enrolled in a pension scheme if they meet the minimum requirements:
Age at least 22
Earning over £10,000 per year
You don’t have pension duties if…
The director doesn’t have an employment contract. They’re not considered a member of staff, so auto-enrolment doesn’t apply to them.
Your company only has directors without employment contracts and no other staff.
Your company has just one director with a contract and no other staff.
👉 But a quick heads-up: even if no one in your team meets the criteria to be auto-enrolled, you may still need to complete a declaration of compliance.
You might receive contact from TPR, and if you want to let them know you don’t believe you’re an employer, you can complete their form here.
What if we hire someone who isn’t a director?
Then things change. The moment you employ your first non-director with an employment contract, your auto-enrolment duties kick in, and you’ll need to let the Pension Regulator know.
Directors who are not eligible for an auto-enrolment pension can still set up a personal pension through Penfold. You can contribute to this through your limited company, which might be attractive for tax purposes. There’s more info here on setting up a director pension.