Most businesses will be entering their first re-enrolment window soon, if not already. So what is workplace pension re-enrolment?
Workplace pensions are mandatory for all businesses with eligible employees. Employees can decide to opt out of making pension contributions, if they do you don’t make contributions on their behalf either. Every three years you are required to re-enrol any eligible employees who have opted out or ceased making contributions.
Below are the steps you need to follow when re-enrolling your employees.
Step 1 – Choosing your re-enrolment date
You should receive a letter from The Pensions Regulator explaining when your re-enrolment window opens. Your re-enrolment window is a 6-month period. This period will cover 3 months before the third anniversary of your staging date, and three months after.
You can choose any date within your re-enrolment window as your re-enrolment date.
Your re-enrolment is specific to your pension staging date, and not specific to when each employee opted out.
Step 2 – Ascertain which employees need to be re-enrolled
You need to assess each employee that has opted out or ceased making contributions to their workplace pension to see if they are still classed as an ‘eligible job holder’. This means they are over 22 and below state pension age, and meet the earning requirements of the workplace pension.
You do not need to re-enrol anyone who has not yet been enrolled into your pension scheme. For example if you have a new employee and have postponed their contributions so they will not have joined the scheme before your re-enrolment date they do not need to be assessed.
You may not have any employees that need to be enrolled, this is fine you can proceed to the final step!
Step 3 – Re-enrol your employees
After finding out who you need to re-enrol, the next step is to get your employees re-enrolled into your pension scheme. This will vary depending on how you process your pensions.
If you submit your pensions manually to your pension provider then on your re-enrolment date you will need to make a submission to them containing the details on the employees you need to re-enrol.
If you use payroll software to submit your pension data then you will probably use the same method to submit your re-enrolments. Please speak to your payroll software provider.
If you use a payroll company to process your pensions then they should have all the information they need, get in touch with them to make sure they have it in hand. It is your responsibility as the employer to ensure re-enrolment requirements are met.
Step 4 – Inform your employees they have been re-enrolled
Send your employees that have been re-enrolled a letter explaining that they have been put back into the workplace pension, and if they wish to opt out again they can. You should explain how they could opt out, and also the benefits a workplace pension offers. Your pension provider may have template letters on their website that you can use.
Step 5 – Make a declaration to the pension regulator
Once you have fulfilled all of your obligations as an employer you need to log into your account with the pensions regulator and make a declaration to inform them all eligible employees have been re-enrolled.
Then you are finished! If you have any questions or feel unsure then get in touch and we will see if we can help you.