Re-enrolment – avoiding the non-compliance trap
Businesses should keep a close eye on their re-enrolment duties in order to avoid damaging financial penalties and risks to reputation, says James Alesbury, HWB’s auto enrolment specialist.
Businesses across the South are required by law to re-enrol all eligible staff that have not opted out in the previous 12 months, at a chosen date by their re-enrolment date. Businesses can choose their re-enrolment date between 3 months before and 3 months after their previous staging/re-enrolment date.
For smaller companies this may be the first time they have had to implement the process, while larger organisations may be undergoing a second phase of re-enrolment. In either case it is a task where compliance is key, says James.
The Pensions Regulator issued 4,794 fixed penalty notices of £400 to employers for failing to meet their auto enrolment duties in the period April to June last year.
“Re-enrolment is a policy put in place to ensure that eligible employees who have opted out of their workplace pension scheme are not left in the pensions wilderness,” says James, an Associate Director at HWB.
“Despite the potential fines, it seems that many businesses are still unaware of their legal duties. It’s fair to say that auto enrolment legislation, despite all the positives it has brought, remains confusing and an administrative burden for many employers.
“It’s worth taking some time to familiarise yourself with your responsibilities and ensuring your chosen compliance solution will handle the re-enrolment process. HWB prides itself on an all-encompassing auto enrolment service and we can offer advice, support and practical solutions to ensure re-enrolment is hassle-free – and most importantly fully satisfies the compliance criteria.”
The re-enrolment date cannot be postponed and doing so risks financial penalties.
Ensure that your re-enrolment date is carefully chosen, such as avoiding seasonal peaks, as this will be the date that is used on the next three-year anniversary.
The next step of re-enrolment
Once you have established which employees are eligible for auto enrolment, the next step is to re-enrol these employees into your workplace pension scheme. This must be done within six weeks of the chosen re-enrolment date and employer and employee contributions must also be paid into the pension scheme.
It is a legal requirement for employers to write to each member of staff informing them that they have been re-enrolled into the pension scheme. The letter must explain that they have been enrolled and explain their right to opt out.
Employers are required to complete a re-declaration of compliance with The Pensions Regulator to demonstrate that they have met their legal duties. This should be done within five months of the third anniversary of your previous staging/re-enrolment date. Employers must do this even if they have not re-enrolled any staff into the pension scheme.
James added: “Re-enrolment can seem to be a complex and confusing process, but it can be seamless and time-efficient with the right support and systems in place.”
For more information about re-enrolment and achieving compliance, or for a no-obligation discussion about HWB’s auto enrolment service, call James on 023 8046 1222 or email firstname.lastname@example.org