Automatic re-enrolment

 

Cyclical automatic re-enrolment occurs approximately ever three years after an employer’s staging date. Essentially cyclical re-enrolment is a repeat of the process the employer carried out on their staging date (or deferral date if they used postponement to postpone all their workers at staging).

However there are some key difference between automatic reenrollment and automatic enrolment:

  • While both automatic re-enrolment and automatic enrolment apply to eligible jobholders, automatic re-enrolment will only apply to eligible jobholders who have already had an automatic enrolment date with that employer.
  • Postponement cannot be used with automatic re-enrolment. If the eligible jobholder criteria are met by a worker on the automatic re-enrolment date, automatic re-enrolment must take place with effect from that date.

 

Crucially, the employer does not have to assess all their workers to identify if any meet the eligible jobholder criteria.
Instead they must assess only the workers who have opted out or voluntarily ceased active membership of a qualifying scheme. The assessment of worker categories carried out on the cyclical automatic re-enrolment date is separate to the employer’s usual assessment process, which they run each pay reference period to identify whether automatic enrolment or any information requirements are triggered.

 

There are a number of steps an employer must take to prepare for cyclical automatic re-enrolment. As it is broadly a repeat of what the employer did at staging, some of the steps in getting ready for automatic re-enrolment are the same as those taken when getting ready for automatic enrolment at staging.

  1. The first step is to choose the cyclical automatic enrolment date. The employer should then work back from this date to understand when they should take the actions outlined below to prepare for this date
  2. Make an initial assessment of the workforce to identify if it is likely they will have eligible jobholders to automatically re-enrol
  3. Engage early with their pension provider to ensure the pension scheme for automatic re-enrolment is ready to process a number of new joiners in a short period of time
  4. Get information ready for those eligible jobholders who are being automatically re-enrolled
  5. Assess the impact on their business processes and the administration of the employer duties. Get ready to manage opt-outs as the eligible jobholder has a one-month period after automatic re-enrolment during which they may choose to opt out.

   

Choosing the cyclical automatic re-enrolment date

The first step for an employer is to know their cyclical automatic re-enrollment date. The employer may choose this date from any date that falls within a six month window, starting three months before the third anniversary of their original staging date and ending three
months after that anniversary.

There are two exceptions to this, where the employer may choose to use a modified process for automatic re- enrolment. These are:

1. if the eligible jobholder being automatically re-enrolled (cyclical or immediate) is already a member of a personal pension scheme with that employer and the employer wants to use that scheme to fulfil their re-enrolment duty, 

or

2. if the eligible jobholder is being automatically re-enrolled as a result of active membership of the qualifying scheme ceasing, either because they ceased to be working or ordinarily working in the UK or they ceased to have qualifying earnings in the relevant pay reference period (immediate re-enrolment). In this case re-enrolment under the modified process can be into a personal pension scheme or an occupational pension scheme.

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