For many employers the process of auto-enrolling their staff has slipped into distant memory as another task ticked off their “to-do” list. However, employers should keep in mind that they could be approaching a new milestone in the workplace pension journey – Re-enrolment.
Re-enrolment applies to all employers on every 3rd anniversary of their staging date and requires them to re-enrol any qualifying staff members who have opted out of the workplace pension. As with the first auto-enrolment process employees who do qualify MUST be put into the pension and start having contributions paid in unless they decide to opt-out again.
The process is clearly designed to put pensions back in the minds of employees as often as possible and make them consider their retirement plans and how they will fund them.
The good news for employers, particularly where payroll administration has been outsourced, is that the process of re-enrolment is relatively straightforward, with most payroll packages handling the assessment of who needs to be re-enrolled automatically. The level of involvement needed from an employer will depend on what their chosen pension provider includes as part of their service.
Employers must consider the following: –
1. Selecting a re-enrolment date – employers have the option of choosing a re-enrolment date between 3 months prior to or after the 3rd anniversary of their staging date. If no alternative date is chosen, many payroll systems will default to the exact date of the 3rd anniversary.
For example, if your staging date was 1st June 2016 you can select a re-enrolment date at any point between 1st March 2019 and 31st August 2019.
2. Assessing who they need to re-enrol – any employee who has opted out of the pension more than 12 months ago and meets the re-enrolment criteria.
3. Carrying out the re-enrolment process – providing the necessary information to the chosen pension provider to re-enrol qualifying employees.
4. Communicating with staff – re-enrolment letters will need to be sent to those affected by the process. Many pension providers handle this automatically and it is important for employers to check with their provider to be clear on what they provide.
5. Completing the Re-Declaration of Compliance – this requires employers to notify The Pension Regulator (TPR) that they have completed the re-enrolment process and can be via the TPR’s website. Some pension providers will complete this on behalf of employers as part of their service, but employers should check whether this is the case to ensure they are compliant with the legislation.
As with the original auto-enrolment process, fines will be levied on those that do not comply. Our advice to all employers is to make sure they understand which of the above process their chosen pension provider will complete on their behalf and plan ahead to ensure they do not fall foul of the legislation. For more information, please visit The Pension Regulator website.