The Cyclical Re-enrolment Process
While auto-enrolment is currently a hot topic for many employers, it has been in existence since October 2012 for the largest employers. This means those employers who were in the first wave of auto-enrolment are now coming up to their first re-enrolment date. The Pensions Regulator refers to this as “cyclical re-enrolment”. It is very similar to the initial auto-enrolment process but there are some new things to deal with:
The first is your CARD - or Cyclical Automatic Re-enrolment Date. This is based on the 3-year anniversary of your auto-enrolment date but can be in a window 3 calendar months either side of that date. While an employer’s Staging Date was a fixed date, the CARD can be changed as a result of the 3 month window. Once you have decided on your CARD, subsequent CARDs are based on the previous CARD. This gives the opportunity to move your renewal date to one which fits into your usual business processes such as your year-end or salary reviews. This may take 2 renewal cycles to achieve.
An employer can choose only one date for all of its workforce - so you cannot use different dates for different sites, or different payrolls, for example. This might require you to split employees’ pay for some of your employees in the pay reference period that the CARD occurs. This would be necessary to ensure that contributions are only taken on the earnings from the CARD if the CARD is not in line with start of their pay reference period.
You cannot postpone the CARD.
The CARD is also the start date of:
- Active membership of a pension scheme for eligible jobholders
- The 6-week joining window
- The calculation of pension contributions.
2. Who needs to be re-enrolled?
Employers should automatically re-enrol workers who:
- meet the criteria to be an eligible jobholder (EJH) on the CARD
- have previously had an automatic enrolment date - or have been an EJH whilst an active member of a qualifying pension scheme (QPS) at any point since the staging / end of postponement date
- are not active members of a QPS with that employer (including where active membership continues, but the scheme is no longer a qualifying scheme in relation to the worker, for example, because the worker has chosen to reduce the level of pension contributions below the minimum)
- opted-out or ceased membership of a QPS with that employer more than 12 months before the cyclical automatic re-enrolment date
- are not subject to the transitional period.
The earnings trigger for the tax year 2016/17 has been set at £10,000 (i.e. the same as 2015/2016).
|Here is a quick checklist to help you through the process of re-enrolment|
- issue worker communications, and
- same as Letter 1 for automatic enrolment , except references to enrolment replaced with
Re-declaration is made to The Pensions Regulator. This must be made within 3 months of your CARD, and will be made online in the same way as your original registration.
Your payroll software provider should be able to provide you with members’ current payment levels and members who have opted out but who now need to be re-enrolled.
The Pensions Regulator has more information on re-enrolment at: www.tpr.gov.uk/docs/detailed-guidance-11.pdf .This includes examples of how to arrive at a CARD for your scheme and much more to help employers through the process of re-enrolment.