This EPN provides information about the requirement for employers to certify that partnership meets the relevant quality standards for their partnership members.
It also advises you how you can become certified, if you are not already, as this will be a requirement for the next Annual Assurance Statement exercise.
1. From 6 April 2019 onwards, the minimum contribution required under automatic enrolment quality standards will be 8% of qualifying earnings, of which at least 3% must be contributed by the employer.
2. Where a scheme explicitly meets the relevant automatic enrolment quality requirement certification is not required. Certification has been designed for employers who have existing good quality money purchase schemes which do not explicitly meet the relevant quality requirement because, for example, the definition of pensionable pay is not the same as automatic enrolment qualifying earnings as defined in legislation.
3 Further detail and detailed guidance about certification is available at https://www.gov.uk/government/publications/automatic-enrolment-guidance-on-certifying-money-purchase-pension-schemes
4. Although partnership is not used for automatic enrolment, once members have chosen to switch to partnership, the scheme counts this as an automatic-enrolment qualifying scheme, and certification requirements are then applied.
5. partnership does not use the definition of qualifying earnings set out in the legislative quality requirements to determine which earnings are pensionable. For example, bonus payments are typically not pensionable. Therefore it is necessary to use certification of quality requirements. This must be done by individual employers, as the scheme does not hold the required data on non-pensionable earnings to undertake the certification tests.
6. Although employers should already be certifying that partnership meets the quality requirements for their members, the scheme is aware that not all employers have been doing this. To ensure future compliance, the scheme will be adding the requirement to confirm the existence of a valid certificate in the Annual Assurance Statement, due to be issued in summer 2019.
7. In addition to this EPN you should review guidance in the Employer Pension Guide about completing the certification. This can be found in section 5.13 of the EPG.
8. Please note that an example certificate is available at the link to section 5.13 above to the detail and guidance about certification. Some details which may be useful for completing the certificate are provided below:
a. The partnership Pension Scheme Registry Number (PSR is): 12005868
b. You are certifying a section/part of a scheme, the details of this is that you participate in a Master Trust arrangement, and you are only certifying that the quality standards of automatic enrolment are met for your organisations members of partnership.
c. The certificate relates to an occupational money purchase scheme
d. You are free to choose whichever alternative quality test to use.
9. If you conclude that partnership does not meet the quality requirements for your partnership members, you should contact the scheme with details of your assessment. If you conclude that partnership does meet the quality requirements for your partnership members you should produce and retain the certificate. You only need to provide confirmation of holding a certificate in the Annual Assurance Statement, you do not need to send the certificate to the scheme or separately inform the scheme that you have passed the test.
10. Alternatively you can decide to carry out an entitlement check instead of certification, as described in this document - https://www.thepensionsregulator.gov.uk/-/media/thepensionsregulator/files/import/pdf/dg-4-appendix-f.ashx
11. Please note that if you have any members within the Concord section of the Civil Service Defined Contribution scheme you should ensure you are certifying quality requirements if you do not use qualifying earnings to define pensionable salary.
12. For additional information on this subject we have created a help sheet for you, this is linked below as 'Annex A - EPN576 Help sheet'. Please use this helpsheet for any questions you may have on the subject. If you still have questions relating to certification, please contact CSPSEmployerEnquiries@cabinetoffice.gov.uk.
If you have a question about the distribution of EPNs contact employerpensionnotice@cabinetoffice.gov.uk.
You can find electronic copies of the Employer Pension Guide, all current EPNs and forms on our website.
This notice is for employers and should not be issued to scheme members.