Employee

Automatic re-enrolment

The information on this page is for employers, including a step-by-step guide, on the process of automatic re-enrolment.

Re-enrolment

It is a legal requirement that approximately three years after your automatic enrolment duties commenced, you must put certain members of staff back into your workplace pension scheme. This process is called re-enrolment. If you don't do it, you could be fined.

There are four important steps that you must carry out to meet your re-enrolment duties. Before we get into that though, there are a few things to consider whilst preparing for the re-enrolment process.

If, however, you want to skip ahead and set up your workplace pension with Smart Pension or switch over to Smart Pension for re-enrolment, simply click the relevant buttons below.

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Preparing for re-enrolment

During the re-enrolment process, many employers will look to carry out a general review of the scheme and to assess whether their current provider still meets the needs of the company and most importantly, its members. Some key areas that the employer might want to consider when preparing and planning for re-enrolment are:

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?

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.

Since the re-enrolment date can be chosen by the employer within a six-month window, it might be helpful to align this date with the start of a payroll period. Successive

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.

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.

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.

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 three year period during which a member may elect to 'opt out' of their employers pension scheme.

Learn about how to switch from your pension provider over to Smart Pension.

Below is a step-by-step guide on the process of automatic re-renrolment.

1. Choose your re-enrolment date

You can choose this date, but it must be within a six-month window which begins three months before the third anniversary of when your automatic enrolment duties commenced (or subsequent re-enrolment date) and ends three months after it.

For example, if your staging date was 1st July 2016, the third anniversary of that staging date is 1st July 2019. Therefore, your three-month window runs from 1st April 2019 to 30th September 2019.

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Even though you can postpone auto enrolment when your duties first commenced, you cannot postpone your re-enrolment date.

For simplicity, it may be a good idea for the re-enrolment date to tie in with the beginning of a month or tax month (depending on your pay reference periods) just so that the re-enrolment date aligns with payroll dates and software and reduces any pro-rata payments. However, if you run more than one payroll you may want to select a date on which the payroll cycles align.

FAQ: You do not need to tell The Pensions Regulator your chosen date until you complete your re-declaration of compliance.

2. Assess your employees to work out which ones need to be re-enrolled into your workplace pension

You need to have all this information ready for your chosen re-enrolment date.

You only need to assess certain staff for re-enrolment, not all of them.

You do need to assess staff who have:

  • opted-out of your pension scheme
  • left your pension scheme after the end of the 'opt-out' period
  • stayed in your pension scheme, but chosen to reduce the level of pension contributions to below the minimum level, and who also meet the age and earnings criteria to be re-enrolled

You do not need to assess or re-enrol any staff member who, on your chosen re-enrolment date:

  • is already in the pension scheme you use for auto enrolment
  • is under 21 years of age
  • is at State Pension Age (SPA) or over
  • has not yet met the age and earnings criteria for auto enrolment (less than 22 years of age and/or is earning less than £10,000 a year (£833 a month or £192 per week))
  • has opted out of your workplace pension scheme within the last 12 months

Having worked out who you are going to re-enrol, you must now put them back into a qualifying auto enrolment scheme and start paying into it.

Specific rules apply to people who have resigned and are working their notice:

  • they do not need to be re-enrolled but if they or you retract their notice,
  • they will need to be assessed for re-enrolment purposes.

An employer may choose whether to automatically re-enrol any eligible jobholder who:

  • opted out or ceased active membership of a qualifying scheme (or a scheme that would, at the time, have been a qualifying scheme) at their own request less within the 12 months before the automatic re-renrolment date
  • was paid a winding-up lump sum within the 12 months before the automatic re-enrolment date whilst in employment with the employer and then, during the 12 month period that started on the date the winding-up lump sum payment was made:
    • ceased employment and
    • was subsequently re-employed by the same employer
  • has given their notice to end their employment (resignation or retirement) or been given notice of dismissal by the employer
  • has primary, enhanced, fixed or individual charges on their pension savings
  • holds the office of director with the employer
  • is a partner in a Limited Liability Partnership which is the employer, and is not treated for Income Tax purposes as falling within HMRC's 'salaried member' rules

If you do have staff who meet the criteria above for being put back into your pension scheme, then you must re-enrol them. Bear in mind that some members of staff may not have met these criteria at either your last re-enrolment date or at auto enrolment, yet do so now.

If there are no staff to put back into your scheme, you do not need to do anything except complete your re-declaration of compliance. In that case, you can ignore Step 3, below.

3. Write all members of staff who are being re-enrolled

You must do this within six weeks of your re-enrolment date - it is a legal requirement. You can do this yourself, or a pension scheme provider or payroll provider may do it for you.

This letter must tell your employees that they will have the right to opt-out from being re-enrolled.

You do not have to write to staff who are not being put back into the workplace pension scheme.

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4. Complete your re-declaration of compliance

This is to show The Pensions Regulator that you have met your re-enrolment duties and has to be done whether you had anyone to put back into the scheme or not. It shows that you are continuing to comply with the government's workplace pension regulations.

FAQ: You must do this within five months of the third anniversary of the date your automatic enrolment duties commenced and each subsequent re-enrolment date.

You can do this as soon as you have re-enrolled staff, or as soon as you work out that there are none to re-enrol – you do not have to wait. In real terms, it is always a good idea not to leave this declaration until the last minute because some information may take time to collect.

Your re-declaration of compliance must usually confirm the total number of employees, along with numbers of those being re-enrolled, those already in the workplace pension scheme and those who are exempt or otherwise not being re-enrolled.

If a third party completes and/or submits your re-declaration of compliance, it is your legal responsibility, not theirs, to make sure that this is done before the deadline. The Pensions Regulator may consider applying a fine if you fail to meet this deadline.

5. Ongoing duties after re-enrolment

Every time you pay a member of staff, or when staff join the company, it is a good idea to:

  • monitor their earnings and age, to see if you do need to put any of them into the pension scheme
  • manage any requests to join or leave your pension scheme
  • keep good records, to make the next re-enrolment as easy as possible in three years' time
  • pay both employees' and employer's contributions into the scheme on an ongoing basis and without delay
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You should also let The Pensions Regulator know if your company's name, address or structure changes. Ideally, TPR should be informed of the owner or most senior person within a business, as well as the details of anyone who is responsible for the management of all re-enrolment tasks.

This guidance is designed to assist employers in complying with their duties in relation to re-enrolment. It is not a definite way of complying with The Pensions Act 2008 and/or any regulations made by that act. Please note that the law itself may change after this guide has been published.

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