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.
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.
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.
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
You should also let The Pension 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.
Managing Director of Smart Pension, Will Wynne, and Anne- Marie O'Leary, editor-in-chief of parenting site, netmums.com, discusses auto enrolment on Sky News and in particular, how it will affect employers who hire home help such as nannies, and don't consider themselves to be employers.