Under Automatic Enrolment (AE), employers must enrol all employees who ordinarily work in Great Britain and who satisfy age and earnings criteria into a qualifying workplace pension. Furthermore, employers must also pay at least the minimum level of contributions into the pension pot.
First introduced back in October 2012, the staggered roll-out was finally completed in March 2018. This is when the last groups of small and micro employers were required to comply at their staging date.
Since October 2017, all new employers have had immediate pensions duties requiring them to automatically enrol eligible employees into a qualifying pension scheme.
What is re-enrolment and re-declaration?
Under current auto-enrolment legislation, every three years (typically the third anniversary of their original staging date) employers must undertake the process of re-enrolment. Any eligible employee, who left the qualifying pension scheme or reduced their contributions below the legal minimums, must be re-enrolled back into a compliant scheme.
However, workers can be excluded from this process if they have opted out or reduced their contributions within the 12 months prior to the re-enrolment date.
In addition to re-enrolment, employers must also complete a re-declaration of compliance. This is an online submission which tells The Pensions Regulator (TPR) how the employer has met their obligations. Even if there are no changes from the original Declaration of Compliance, or if there were no eligible staff to re-enrol in the scheme, a re-declaration is still a requirement.
Eligible staff are those who are deemed to have met the following criteria:
- aged between 22 and state pension age; and
- earn over £10,000 a year, £833 a month, or £192 a week.
How do I comply with my three-year re-enrolment duties?
It is best to think of re-enrolment as a ‘two-stage’ process.
Stage 1 – Re-enrolment
1. Set a re-enrolment date (any date between the period of three months before and three months after the third anniversary of your staging date).
2. On your payroll that includes your re-enrolment date, you will need to assess your staff and identify who meets the criteria to be re-enrolled into your pension scheme.
3. Write to those staff individually, within six weeks, to inform them that you have re-enrolled them.
Stage 2 – Re-declaration
1. Complete the re-declaration of compliance within five months of the third anniversary of your automatic enrolment staging date. You can start your re-declaration at any time after you have re-enrolled staff. The Pensions Regulator can issue fines if the re-declaration is not completed in time.
Employees do have the right to opt out again if they wish, after being re-enrolled. As with their original enrolment, there is a one-month window where they can opt out and they may be entitled to a refund of their contributions.
After the opt-out period ends an employee can still choose to leave the scheme if they wish. Under either set of circumstances, employers must follow the rules of the pension scheme. All opt-out notices and records should be kept accordingly.
Will my re-enrolment duties be ongoing?
In short, yes, your duties will be ongoing! Each time an employer pays staff they should already be maintaining the duties of assessment and enrolment. However, in addition to this, every three years you are legally obligated to reassess staff to identify those eligible to be re-enrolled into a qualifying pension scheme. Each time, a re-declaration of compliance must also be completed.
The advice to employers is that, each time they pay staff, they should carry out the following tasks:
1. Assess all workers to ensure all auto-enrolment duties are being met, including enrolling eligible employees and issuing statutory communications. This is of particular importance for those you have never automatically enrolled, or new starters.
2. Manage requests to leave or join the pension scheme.
3. Keep records of how legal obligations have been met. This could include proof of payment into the pension scheme, requests to join/leave or pension scheme reference numbers.
It’s also worth bearing in mind that…
…the re-enrolment date is only based on the third anniversary of your staging date the first time you complete the process. For all subsequent re-enrolments, the date is based on the third anniversary of the previous re-enrolment date.
How can GH Payscheme help?
GH Payscheme is a professional payroll bureau service, in Biggleswade, Letchworth and Huntingdon. The services we provide have been developed specifically to help businesses operate more efficiently and cost-effectively.
We offer a comprehensive, confidential and competitively priced outsourced payroll solution for businesses of any size, operating in any industry sector, in any location.
Our team can assist you with administering your chosen workplace pension scheme and help you to ensure that you comply with all of the requirements of automatic enrolment and re-enrolment.
To discuss your requirements in more detail with one of our experts, call us on 01767 315010 or email payroll@ghpayscheme.co.uk
