Should You Re-Enrol Your Staff Into The Pension Scheme?
Do your employees keep asking you about the Pension scheme but you don’t have one?
As a Business Owner, every three years you will need to re-enrol your staff who are eligible for automatic enrolment but aren’t in a qualifying scheme.
As an employer, your duties will vary depending on whether you have staff to re-enrol or not. Either way, you will need to complete a re-declaration of compliance. This is needed to inform The Pensions Regulator (TPR) how their duties have been met.
The steps below will guide you through your employer re-enrolment responsibilities to keep you on the right track…
Step 1 – Choose Your Re-Enrolment Date
An employer’s re-enrolment date occurs by default on the third anniversary of their automatic enrolment staging date. Fortunately, there is a six-month window that you can choose from. This being, three months on either side of the anniversary of the staging date.
How do I find my re-enrolment date?
The Pension Regulator re-enrolment date tool will assist you in choosing your re-enrolment date.
Step 2 – Assessing Your Employees Within Your Payroll Software
The employees that must be assessed must meet one of the following criteria:
- 1st… they opted out of the pension scheme.
- 2nd… they left the pension scheme after the opt-out period.
- 3rd… they are still enrolled in the pension scheme. But have reduced their contributions so it is now below the total minimum level.
There may be certain staff that meet the above criteria but do not need to be assessed if they fall into one of these categories:
- Already in a qualifying pension scheme.
- Below the age of 22.
- Are at, or over state pension age.
- They have not met the AE earnings criteria.
Where employees meet the age and earnings criteria, there are certain circumstances where the employer can choose whether or not to re-enrol the employee:
- Employees who left the automatic enrolment pension scheme within the 12 months leading up to the re-enrolment date.
- Employees who were paid a winding-up lump sum in the 12 months leading up to the re-enrolment date. Then left the employment and were later re-employed by the same employer.
- Employees who have either given notice or been given notice of the end of their employment.
- Employees who hold the office of director with the employer.
- Lastly, employees who are a partner in a Limited Liability Partnership. Which is the employer, and is not treated for income tax purposes under HMRC’s salaried member rule.
Step 3: Re-Enroling Your Employees
Once you have determined which employees are eligible for automatic re-enrolment. The next step is to re-enrol these employees into a workplace pension scheme.
This must be done within six weeks of the chosen re-enrolment date.
Employer and employee contributions must also be paid into the pension scheme.
Step 4: Communicate With Your Employees
After re-enrolling any staff member back into an automatic enrolment pension scheme. You are legally obliged to write to each member of staff informing they have been re-enrolled into the pension scheme.
The letter must explain that they have been enrolled. It must also explain their right to opt out of the pension scheme. And it must also contain details of what contributions will be paid into the scheme. Your chosen payroll software will produce this letter.
Step 5: Complete Your Re-Declaration Of Compliance
The re-declaration of compliance must be completed within five months of the third anniversary of an employer’s automatic enrolment staging date. Furthermore, the re-enrollment date chosen by the employer does not change the re-declaration deadline.
The re-declaration of compliance is an online form. It informs The Pensions Regulator that the employer has met their legal re-enrolment duties.
If someone else is helping the employer with their automatic enrolment duties, it is still the employer’s legal responsibility to ensure the re-declaration is completed on time and filled in, correctly.
To complete your re-declaration of compliance, you can do so here.
Although an employer has five months to complete this re-declaration of compliance. It is recommended that it is completed as soon as possible after the re-enrolment date.
Whether you had staff to put back into your pension scheme or not, you will still have ongoing pension duties.
Then, every three years you will need to reassess your staff to see whether you have any who must be put back into your pensions scheme
Failure to complete your pension duties could result in you receiving a fine from the Pension Regulator.