Whether plain sailing or laboured, for those business owners who’ve already navigated Auto Enrolment they may be unaware that they will have to do it all again on their 3 year enrolment anniversary under the context of the rather jazzily entitled “cyclical re-enrolment”. Head of Corporate Services Jonathan Craig explains all in a recent article as featured recently in The Press & Journal.
Just as the auto enrolment process disappears into the rear view mirror, the task of re-enrolment rolls around the corner, bringing with it the responsibility of placing certain employees back into their workplace pension scheme.
In short, the re-enrolment process effectively mops up the following categories of employee and places them back into the workplace pension scheme:
- Those who originally opted-out of the workplace pension scheme;
- Those who ceased pension contributions after the opt-out period expired;
- Those who reduced pension contributions to below the minimum level set by the Government.
Although the process looks and feels a lot like that of the original Staging Date, there are a few key differences and optional exclusions.
For example, those who either opted out or ended their membership to the workplace pension within 12 months of the re-enrolment date, can be omitted from the exercise.
Equally workers who have given or been given notice to the end their employment can be excluded; wealthier employees who have existing pension savings registered for transitional protection e.g. Enhanced Protection, Fixed Protection can be left out of the exercise.
On the surface, the re-enrolment process could be viewed as an inconvenience i.e. putting employees back into a pension scheme who didn’t/don’t wish to be part of the pension scheme. In reality, the process of re-enrolment actually affords the opportunity for the business to take a step back and evaluate their current workplace pension scheme and its value to employees.
Does the current pension scheme remain suitable and competitive in terms of charges/costs and what it offers employees? For many, Auto Enrolment was left to the last minute to address and so in hindsight if more time was allocated to planning the exercise, would the same pension scheme provider still be selected? Could there be a better alternative available that might represent a cost saving to the employer with greater transparency and employee engagement?
Additionally, if any part of the ongoing worker assessments and enrolment process is managed by anyone other than a payroll provider then could a cost-saving be achieved by integrating these fully into the payroll provider’s services?
With a heightened awareness among employees, but not necessarily the detail, of how they can access their pension benefits, does the current pension provider offer sufficient online education materials to which can help put the employee in an informed position allowing them to make the best decisions for their retirement future?