You may recall that the auto-enrolment regime for workplace pensions includes a requirement for employers to re-enrol eligible employees who have opted out back into their auto-enrolment scheme. In a recent report, the Pensions Regulator has flagged that the time has now come for small to medium sized employers to start the re-enrolment process where they are approaching the three year anniversary of their staging date. All employers will need to complete a re-declaration of compliance with auto-enrolment, so this duty is important.
Employers will need to:
Where an employee opted out after the staging date, their re-enrolment date will be attached to the three year anniversary of that opt out date. There is broadly a six week period during which employees could have opted out (likely from the date of their automatic enrolment into the workplace pension scheme, or the later date when they received information on the scheme), so the re-enrolment process will take place for all employees during a set window. There is a six month period for the re-enrolment process to take place in, running from the date three months before the three year anniversary of the staging date until the date three months after that anniversary, and employers can select the date for re-enrolment within this time period.
- check whether or not they have any employees caught by the requirement to re-enrol, and
- to make sure that the scheme administrators enter all eligible employees into the scheme. It is worth checking employees’ eligibility carefully because, for example, if any of your employees who opted out of auto-enrolment have since reduced their working hours or changed to a lower grade job, they may no longer earn the minimum amount to trigger the auto-enrolment requirement.
A re-enrolled employee will still be able to opt out. Auto-enrolment scheme providers will have information and forms to send to the employees about opting out.
Employers will need to complete an online ‘re-declaration of compliance’, available on the Regulator’s website, to confirm that they have undertaken the re-enrolment process. There is also an online tool to help employers understand what the Regulator requires. This must be carried out promptly as the Regulator will take enforcement action against any employer failing to comply.
For further information or assistance please contact the pensions team.