Automatic Re-Enrolment
Every three years employers must put certain members of staff back into an auto enrolment pension scheme. This is called re-enrolment. Re-enrolment occurs three years after your staging date and is a legal duty whereby if you don’t act, you could be fined. Your duties will vary depending on whether you identify that you have staff to re-enrol, or whether you have no staff to re-enrol. Either way, you will need to complete a re-declaration of compliance to inform The Pensions Regulator that you have met your automatic re-enrolment duties.
1. Choose your re-enrolment date
The first step is to choose your re-enrolment date and this should be done as soon as possible. Your re-enrolment date is chosen by you, with a six-month window to choose from. Therefore, you may decide to align your re-enrolment date with your other business processes such as the start of your financial year or to avoid seasonal peaks.
This window falls three months either side of the third anniversary of your staging date. Regardless of whether or not you use postponement at your staging date, re-enrolment occurs three years after your staging date, not your deferral date. This date will apply to all staff, you can’t use different dates for different staff members or groups of staff. Be aware that postponement cannot be used for re-enrolment.
2. Assess your staff for re-enrolment
Once you reach your re-enrolment date, you will need to assess staff to work out if you need to put them back into your pension scheme. You only need to assess staff who have previously opted out or voluntarily ceased active membership of a qualifying scheme. You must determine whether these employees meet the criteria to be automatically re-enrolled.
You can also choose to re-enrol various staff members, for example directors, those who are a partner in a Limited Liability Partnership, those who have left the scheme within 12 months of your re-enrolment date, and those who have given notice or been given notice of the end of their employment.
Having worked out which staff must be re-enrolled, you must now put them back into a pension scheme within six weeks of your re-enrolment date.
You must re-enrol any member of staff who:
- Left your auto enrolment pension scheme more than 12 months before your re-enrolment date
- Is aged between 22 and state pension age
- Earns over the earnings threshold (currently £10,000 per annum)
3. Write to staff who have been re-enrolled
It is your legal duty to write to each member of staff you have put back into your pension scheme. This must be completed within six weeks after your re-enrolment date. You do not have to write to staff that are not being put back into your pension scheme. Some pension providers may do this on the employer's behalf. Once an employee has been re-enrolled, BrightPay will automatically prepare their enrolment letter.
4. Re-declaration of Compliance
Following re-enrolment, all employers must complete a re-declaration of compliance, even if you do not have staff to re-enrol into your pension scheme. This is to inform The Pensions Regulator that you have completed your automatic re-enrolment duties. This must be completed within five months of the third anniversary of your automatic enrolment staging date. The Pensions Regulator website has full details on the requirements and process here.
Automatic Re-Enrolment Every Three Years
At the next cyclical automatic re-enrolment date, the employer must repeat the re-enrolment assessment. Again, this is a date of the employer’s choice; from a six-month window starting three months before the third anniversary of the employer’s last cyclical automatic re-enrolment date and ending three months from that anniversary. Make sure that your chosen payroll software can handle the re-enrolment process.
Automatic Re-Enrolment in BrightPay
As soon as you reach your re-enrolment date in the payroll, BrightPay will automatically assess your employees for you and will determine which employees qualify for re-enrolment. If employees meet the criteria for re-enrolment, on-screen flags and alerts will appear to notify you that you now have re-enrolment duties to perform. This feature is included in BrightPay and will be activated by entering your chosen re-enrolment date.
BrightPay will automatically prepare the employee’s enrolment letter, which must be provided to the employee within the six-week period after your re-enrolment date. These letters can be printed, exported to PDF, emailed to the employee, or if you are using BrightPay Connect, the letter can also be added to the employee’s self-service portal.
