One of the requirements of auto-enrolment is that every three years employers must go through the re-enrolment process.
On your re-enrolment date, you’ll need to assess certain staff to work out if you need to put them back into your pension scheme.
As part of re-enrolment, employers must assess staff who fall into the following categories:
- Those who asked to leave (opted out of) the pension scheme
- Those who have left (ceased active membership of) the pension scheme after the end of the opt-out period
- Staff that have remained in the pension scheme – but who have chosen to reduce the level of pension contributions to below the minimum level
If you identify staff who need to be re-enrolled, then you must put them back into your company pension scheme and start paying contributions within 6 weeks of their enrolment.
The Pensions Regulator has identified a four-stage process that every employer should address as part of re-enrolment, which includes: 1) Choosing your re-enrolment date, which must be within the period that falls in the three months either side of the third anniversary of your staging date 2) Assessing staff, 3) Writing to staff that are to be re-enrolled and 4) Completing your declaration of re-compliance.
Liz Fisher, Tax and Employer Solutions Manager at Mitchells Chartered Accountants and Business Advisers, explained the importance of employers ensuring they comply with the re-enrolment process, saying: “Most employers are juggling a lot of balls at once and re- enrolment can be seen as just another job to add to a very long list. However, this job needs to go to the top of the list. If it doesn’t, you could be liable for big financial penalties and possible prosecution.
“Your re-enrolment date may be months or even years away, but it’s important to ensure that you do not miss it and that you understand your legal obligations as an employer.”
Re-enrolment is just one of the changes to Auto Enrolment employers will face in 2018. From 6 April, employer and staff contributions into Auto Enrolment pension schemes will increase. Learn more about the increases here.
If you need help and guidance to meet your Auto Enrolment obligations, contact Mitchells’ expert team today on 01246 274 121.