Despite all the advertising on the television, on the radio and in the press as well as numerous articles by those involved with Auto Enrolment there are still employers who think they don't have to do anything about setting up a pension scheme. We know because they have come to us for help after their Staging Date has passed.
There are some situations where you do not have to have a scheme and these are outlined on The Pension Regulator website but you will still need to do a Declaration of Compliance. Your employee not wanting to contribute is not an acceptable reason for ignoring your Staging Date. You are still obliged to set up a scheme if your employee meets the criteria to be auto enrolled as a contribution will need to be made by you and by them from their first pay after your Staging Date or after your postponement period. If they opt out within one month both your and their contribution will be refunded.
Even if you do not have anyone staying in your pension scheme once set up it will continue to be available for any new employees you employ at a later date who may need to be auto enrolled or may choose to join it.
If you do not set up a scheme by your Staging Date you may receive a penalty which could be a significant amount. If you have missed your Staging Date, have had at least one pay period since your Staging Date and have employees who should have been auto enrolled the advice from The Pension Regulator in order to avoid the penalty is for you to pay the missed employer contributions for each employee into the scheme. Employees will not have to pay backdated contributions. This means that you still have to set up a scheme even if your employee doesn't want to be part of it and the backdated contributions will remain in your employee's pension pot unless the employee opts out within the specified time.
We have experienced this situation on more than one occasion so our advice is to get your pension scheme set up by your Staging Date to avoid paying contributions for employees who don't want to be in the scheme or who may have already left your employment.