It is now nearly three years since the first tranche of employers – the largest – had their auto-enrolment staging dates in 2012. They now face the first 'cyclical automatic re-enrolment' which, as with the original process, could involve extensive project management.
Clare Abrahams, head of auto-enrolment at Aon Employee Benefits, said:
“It may again be decision time for some employers, as they assess just how happy they are with the measures and providers they first put in place to deliver auto-enrolment to their workforce. While the process this time around should be less onerous than it was initially, it will still need careful planning to make certain that all the employee audiences are covered, that providers can support them with any new compliance requirements, and that the Declaration of Compliance is completed by the statutory deadline.
“And - if the current solution isn't working the way it should - now could also be the time to consider a complete change to something that does work.”
The Pensions Regulator has set out some steps that employers need to take but Aon has some additional suggestions for employers to consider:
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Hold a thorough review of your current process – what works, what doesn't, what might you now change?
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Is there new technology from which you could benefit?
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Are you restricted by your current providers and technology?
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Are your providers equipped to deal with re-enrolment processes and what actions might need to be taken to enable this?
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What might a completely new pension arrangement offer you?
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Does your designated date fit well with other key business dates? Should it be shifted? This timing might be particularly critical if you have weekly payrolls.
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Do you have appropriate communications in place for the re-enrolment process? (Note that postponement cannot be used and you may have to communicate to more than just those being re-enrolled.)
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Do you need to communicate any contribution rate changes? Is a consultation required to implement these?
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Are you prepared for the business impact and potential increase in employer pension contributions?
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Is an appropriate process in place to accept and manage opt-outs?
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Will contractual enrolment be considered and, if so, what steps are required to make this happen?
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How will the new Declaration of Compliance be adhered to and are you aware of the statutory deadline that applies?
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Should anyone be excluded this time?
Clare Abrahams said:
“As can be seen from that list, this is not a formality for employers and will require serious thought. On the other hand, for some it will be a great opportunity to correct any issues they have had over the last three years or to fine-tune the processes they have – ultimately to the benefit of both the employer and the scheme members.”
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