In a recent report, the Pensions Regulator 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.
The auto-enrolment regime for workplace pensions includes a requirement for employers to re-enrol eligible employees who had originally opted out at the start of their auto-enrolment scheme.
Therefore, all employers will need to complete a re-declaration of compliance with auto-enrolment.
Employers will need to:
check whether or not they have any employees caught by the requirement to re-enrol, and
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.
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.
The re-enrolment process needs to take place within a six month period, 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 six month period.
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 process must be carried out promptly as the Regulator will take enforcement action against any employer failing to comply.