Automatic enrolment and communicating to workers: What employers and their advisers need to know

The law on workplace pensions has changed. All employers, including those with existing workplace pensions, will have to take some action as a result of automatic enrolment. They will need to identify if and when automatic enrolment applies to each one of their workers. This includes temporary and part-time workers. Where they have staff to enrol, they need to ensure they have a suitable qualifying pension scheme, enrol them into the chosen pension scheme and make contributions.

Within six weeks of their automatic enrolment duty coming into effect, all employers must tell their staff how automatic enrolment affects them as individuals. This means employers must inform their staff in writing how they have been assessed for automatic enrolment and what that means for them.

Depending on whether they are assessed as needing to be automatically enrolled, or as having a right to opt in or join a pension scheme, each member of staff will be sent specific information.  Even if a member of staff is unaffected by the changes, for example if they are already members of an existing qualifying workplace pension scheme, they must still be informed in writing about what is happening.

The table below summarises the information which must be provided to each type of worker.

Category of worker

You must let them know:

Being automatically enrolled

  • the date they are being automatically enrolled
  • the level of contributions that will be deducted from their pay
  • the level of contributions the employer will pay
  • details of the pension scheme provided
  • their right to opt-out

Has a right to opt in

  • their right to opt in
  • their right to receive employer contributions if they do

Has a right to join a pension scheme

  • the opportunity to join the workplace pension

It is important that employers understand that even if the communications are managed and sent by a third party (for example a business adviser, the pensions provider, or payroll software provider), the statutory responsibility to communicate to staff remains with the employer.

How should the information be communicated?
In order to meet their statutory duty, all staff must be given information explaining how they are affected by automatic enrolment. These communications must be in writing – whether within a letter, email, memo or PDF document. It is not sufficient to merely signpost to an internet or intranet site, attach a URL or display a poster in the workplace. In these circumstances the employer is merely providing the worker access to the information about the duties but is not giving the actual information.

The Pensions Regulator has a number of letter templates, which can be used to write to staff. When using these templates, copy the text into a plain document (or your client’s own headed template) and fill in the date and contact details of the member of staff being written to.

Letter template for employees who are being automatically enrolled
Letter template for those not automatically enrolled
Postponement letter template for all employees

 

Postponement
Postponement is a flexibility which allows the employer to postpone the assessment of some or all of their staff for up to three months.  Employers must write to the staff being postponed within six weeks of their staging date (the date at which automatic enrolment duties start).

One of the main reasons an employer may decide to postpone is if they have temporary or short-term staff who they know will stop working for them within three months. They may also choose to use the postponement period to align automatic enrolment with other business processes.

While there is no requirement to make The Pensions Regulator aware that a decision has been taken to postpone automatic enrolment, it’s important to be aware that postponement will not change an employer’s declaration of compliance deadline, which will remain the same (5 months after staging date).

For more information on postponement, go to www.tpr.gov.uk/employers/postponement

Useful links:

Find out when automatic enrolment applies to your clients with our staging date calculator at www.tpr.gov.uk/staging-date

Guide your clients through the basics with our introduction to automatic enrolment at www.tpr.gov.uk/essential-guide

For information on what must be provided to what type of staff and links on where to find more information
Detailed guidance 10: Information to workers (PDF, 144kb, 35 pages)

For communicating with staff whose automatic enrolment has been postponed. Paragraphs 22-40 explain the different types of postponement notices.
Detailed guidance 3a: Postponement (PDF, 41kb, 32 pages)

Find more information and resources to help your clients get ready for automatic enrolment at www.tpr.gov.uk/help-clients-prepare

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