No pension account after six months? The rule

Some employees start a job and never open a pension account. The Act has a specific answer once six months have passed.

The six-month point

The Act deals with an employee who has not opened a Retirement Savings Account (RSA) after six months in the job. Before that point, the employee is expected to open an account with a pension fund administrator (PFA).

Six months is a long window. It does not mean employers can forget the task. It means the Act expects the employee to act first.

What happens once it passes

After six months with no RSA, the employer asks a PFA to open a nominal RSA for the remittances. This is subject to PenCom's guidelines. It is not an informal workaround.

A nominal RSA is the account the employer asks a PFA to open, rather than one the employee opened. This article does not cover what happens if the employee later registers elsewhere. Ask the PFA.

Whose job this is

After the six-month point, the task is the employer's. An employer that simply waits, hoping the employee will register, is not following the Act's own sequence.

Payroll or HR should flag any employee still unregistered as the six-month mark gets close. Finding the gap early is far easier than finding it in a compliance review.

Ask a PFA about the months in between

The Act sets the six-month point and the nominal RSA. It leaves the detail to PenCom's guidelines. The general remittance deadline is within 7 working days of the day salaries are paid, and our post on the remittance deadline and late penalty covers it.

How that deadline applies to a staff member with no RSA yet is a question for a PFA. Get the answer in writing. Your records should show why each contribution was handled as it was.

Checking before it becomes a compliance gap

A certificate application asks for evidence of remittances for all employees for the last 3 financial years, and a staff list as registered with your PFAs. Unregistered staff can complicate both.

Build a check for new hires without a registered PFA into your onboarding. Track it on the same compliance calendar as your other pension deadlines.

A simple routine covers most of it:

Ask every new hire for their RSA and PFA details in the first month.
Record which PFA each employee chose.
Diary the six-month point from each start date.
At that point, ask a PFA to open a nominal RSA for anyone still unregistered.

Common mistakes

Waiting past the six-month point without asking a PFA to open a nominal RSA.
Leaving contributions for that employee unrecorded after the six-month point.
Not checking, before a certificate application, whether any staff are still sitting in a nominal RSA.
Assuming the nominal RSA fixes the problem for good, without asking the PFA what happens next.

For the wider rules, see PenCom contribution rate: employer and employee and the tender compliance hub.

Questions people ask

How long does an employee have to open a pension account?

The Act's rule applies after six months in the job. Before that point, the employee is expected to open a Retirement Savings Account (RSA) with a pension fund administrator (PFA).

What happens once six months passes with no account?

The employer asks a PFA to open a nominal RSA on the employee's behalf, so the remittances have somewhere to go, subject to PenCom's guidelines.

Do the remittance rules still apply?

The Act's remittance deadline is within 7 working days of the day salaries are paid. How it applies to a staff member with no RSA yet is not something this article can settle, so ask a PFA.

Whose responsibility is a nominal RSA?

The employer's, working through a PFA. Once the six-month point has passed, it is not left to the employee alone.

What happens if an employee has no pension account after six months?

Quick answer