5 June 2017

Adviser The advent of automatic enrolment and compulsory workplace pensions has been ongoing since October 2012. Most of the country's large and medium sized businesses have now been through this process. Currently, in 2017, we are busy supporting the small and micro sized employers.

There is now a great deal of activity in the industry to revisit those employers who initially 'staged' three years ago, as there are now more, and possibly better, auto enrolment options available. Good scheme governance means that employers, in conjunction with their advisers, should really be reviewing their pension scheme periodically – i.e. every three years. A three year cycle also coincides with the 3 year period during which a member may elect to 'opt out' of their employers pension scheme.

What is re-enrolment?

Automatic re-enrolment is a process that occurs every three years on the anniversary of a scheme's start date. Every member who opted out during the initial enrolment into the scheme is automatically re-enrolled (provided they are still eligible). Any member of staff who is eligible but isn't already an active member of the scheme, will also be enrolled at this time.

5 things to remember:

  1. Payroll systems. During the three years since the launch of the scheme, payroll and payroll integrations have come along way. Questions should be asked around the software currently being used e.g. Does it do the job(s) it needs to? Does it work smoothly with the pension scheme in question? Are there better alternatives available?
  2. Choosing a re-enrolment date. An employer must elect a re-enrolment date as they approach the third anniversary of their staging date. The date itself can fall three months either side of the staging date, giving employers a flexible six month window e.g. employers who staged on 1st May 2013 can choose to re-enrol on any day between 1st February and 31st August 2016.
  3. Re-declaration to The Pensions Regulator. Following re-enrolment, it is the responsibility of all employers to submit a re-declaration of compliance within five months of their staging date anniversary.
  4. Data cleansing and integrity. It is best practice during this re-enrolment exercise to carry out some data cleansing. Incorrect or inconsistent data can develop over time such as changes in an employee's address, email address and surname being some of the more common errors. This re-enrolment exercise is an ideal opportunity to review the data on record and carry out some basic checks to ensure the scheme data is as accurate and up to date as possible.
  5. Suitability. Equally as important is a general review of the scheme itself. Has the service that has been delivered by your pension provider been of a sufficient standard and quality over the past few years? Have the investments underpinning the scheme performed as well as hoped / in line with other pension providers? These are just two of the basic questions an employer should ask themselves.

2017 will see a very large tranche of larger employers going through a review of their current workplace pension set-up whilst undergoing the process of re-enrolment. Making the right informed choices now, based on three years of auto enrolment experience, will make the next three years potentially much smoother and less troublesome.

To find out more about re-enrolment with Smart Pension including a step-by-step employer's guide to automatic re-enrolment, please visit our Re-enrolment and Switching Pension Provider page.

  • Author Profile
    • Sp avatar Ceri Ross

      Ceri is a Business Development Manager at Smart Pension.