So, you’ve started your AE scheme and everything is running smoothly. Breathe a sigh of relief and get back to running your business, right? Not quite. AE is an ongoing responsibility and there are certain tasks that you will have to continue to do, or re-visit periodically.
Complete your Declaration of Compliance
Once your auto enrolment scheme is under way, you must complete your Declaration of Compliance. If you have already completed the first five pages, you can now finish the remaining three. Although you have five months to complete your Declaration of Compliance, if you put it off, those five months will quickly disappear. Get it done now while it is all fresh in your mind.
Effectively, every time you do a payroll run, you have to re-assess your workforce under AE. If any of your employees have a pay increase that takes them over any of the AE thresholds, or they reach 22 or state pension age, their worker status for auto enrolment will change. There are several different scenarios and although this sounds complicated, don’t worry. If you are using payroll software, it should manage this re-assessment every time you input the information for a payroll run. If, however, you run a manual payroll system, or use a third party payroll service you will need to make sure these changes are recorded to ensure correct workforce assessment.
When a new employee joins your organisation, they must be assessed and categorised for auto enrolment, receive the relevant communications and be processed in a correct and timely manner. Their rights to be automatically enrolled, opt-in, join, opt-out or cease active membership are exactly the same as your existing workforce. The only difference is the time frames that will apply. These will be from their employment date rather than your AE scheme commencement date.
Process any additional opt-out notices received less than 30 days after enrolment date
As mentioned in Step 6, Eligible Jobholders that have been automatically enrolled have the right to ‘opt out’ within 30 days and receive a refund of any contributions deducted form their salary. This applies to new starters as well, so this process will be ongoing, albeit to a much lesser degree.
Process any notices to â€˜cease active membershipâ€™ received more than 30 days after your staging date.
Once 30 days have expired, all workers enrolled in an AE scheme have the right to leave the scheme at any time, however they will not automatically receive back any contributions they have made. This process is no longer ‘opting out’, but is now referred to as ‘ceasing active membership’ In most cases, their pension contributions will remain in a pension ‘pot’, held by the provider until the individual is eligible to receive their pension.
Process any opt-in or joining requests from employees
Non-eligible Jobholders can elect to opt-in, and Entitled Workers can request to join your AE pension scheme at any time. Upon doing so you must process their request and deal with it in the appropriate manner. There are several subtle differences in the way these different types of worker are dealt with, read more about this here.
The Pensions Regulator insists that all relevant Auto Enrolment documentation must be kept for a minimum of six years (apart from opt-out notices which must be kept for four years) This is a legal responsibility. If using payroll software, these records should be kept within the system, however you may want to keep hard copy manual records as well.
More about this, and re-submitting your Declaration of Compliance in Step 8.