Auto enrolment legislation requires that every three years, employers must re-assess employees who have opted out or ceased active membership of a qualifying auto enrolment scheme. This is known as re-enrolment.
The aim of this is to give eligible employees that may have decided not to save in a workplace pension, the opportunity to re-consider their decision. People’s circumstances change and while they might not have felt in a position to save when auto enrolled initially, over the course of three years, they may feel differently.
For the biggest firms, the three year re-enrolment anniversary is looming large. For smaller firms, this may still be some time away. But, it pays to be prepared as re-enrolment isn’t necessarily a straightforward process and it isn’t a one time only event!
Top five tips for preparing for re-enrolment
- You must choose your own re-enrolment date and it can be any date within three months before your staging date anniversary and three months after.
- Choose your date wisely as you cannot use postponement. If you have more than one payroll you may want to choose a date which works well for all payrolls. You don’t need to tell The Pensions Regulator your chosen re-enrolment date until you re-certify compliance.
- Up-to-date and accurate records of which members of staff have opted out or ceased membership and when are critical so you know who to re-enrol. Employees that opted out within 12 months of re-enrolment don’t have to be re-enrolled nor do employees that have handed in their notice or those who have protection from lifetime allowance tax changes.
- Re-enrolment has to be done every three years and you have to re-declare your compliance with The Pensions Regulator. Generally you have two months from your re-enrolment date to re-declare compliance however if you do not have anyone to re-enrol the deadline is strictly three years exactly from when you originally declared compliance.
- Consider how you communicate with your staff about re-enrolment. NOW: Pensions will send the required re-enrolment notices but for some it could come as quite a surprise and be a cause of frustration so be prepared to answer their questions. There is no need to contact those who aren’t eligible to be re-enrolled.
With re-enrolment, a little planning and forethought goes a long way so don’t be tempted to leave it until the last minute.