Pension Auto Re-Enrolment

Every UK employer with auto-enrolment duties must carry out a re-enrolment exercise approximately every three years. This process requires employers to re-assess their workforce and re-enrol any eligible workers who have previously opted out of or stopped contributing to the workplace pension scheme.

The purpose of re-enrolment is to ensure that workers who opted out — perhaps when they could not afford contributions — are given a fresh opportunity to save for retirement as their circumstances may have changed.

When Re-Enrolment Must Happen

The re-enrolment date is linked to your original staging date (the date you first had to comply with auto-enrolment duties). You must choose a re-enrolment date that falls within a six-month window: three months before to three months after the third anniversary of your staging date (or your previous re-enrolment date).

Example Timeline

If your previous re-enrolment was on 15 July 2024, the next one must happen within three months either side of 15 July 2027.

Who Must Be Re-Enrolled

On your chosen re-enrolment date, you must re-enrol any worker who meets all of the following criteria:

Workers who are already active members of the pension scheme and contributing at or above the minimum level do not need to be re-enrolled — they are already in the scheme.

Who You Do Not Need to Re-Enrol

You do not need to re-enrol workers who:

• Are already active members of a qualifying scheme with adequate contributions
• Gave notice to opt out within the previous 12 months before your re-enrolment date
• Gave notice to leave the scheme within the 12 months before the re-enrolment date
• Are company directors who are the sole employee of the company (no contract of employment)

The Re-Enrolment Process

Step 1: Choose Your Re-Enrolment Date

Select a date within your six-month window. Many employers choose the anniversary date itself for simplicity, but any date within the window is acceptable.

Step 2: Assess Your Workforce

On the re-enrolment date, review your workforce to identify:

• Workers who have opted out since the last enrolment or re-enrolment
• Workers who have reduced or ceased contributions
• Workers who now meet the age and earnings criteria but did not at the time of initial enrolment

Step 3: Re-Enrol Eligible Workers

Enrol the identified workers into your qualifying pension scheme. You must:

• Write to each re-enrolled worker informing them of the enrolment
• Explain their right to opt out again within one month
• Begin making minimum employer contributions from the re-enrolment date

Step 4: Complete a Re-Declaration of Compliance

Within 5 months of your re-enrolment date, you must submit a re-declaration of compliance to The Pensions Regulator (TPR). This confirms that you have carried out the re-enrolment exercise.

The re-declaration must be submitted even if you had no one to re-enrol. Failing to submit it is a compliance failure in its own right.

What Happens When Workers Opt Out Again

Workers who are re-enrolled have the same one-month opt-out window as they did at initial enrolment. If they opt out:

• Any contributions made during the opt-out period are refunded
• The worker will be re-enrolled again at the next re-enrolment date (in approximately three years)
• You cannot encourage, incentivise, or coerce a worker to opt out

Employer Prohibitions

It is a criminal offence for an employer to:

• Encourage or induce a worker to opt out
• Treat a worker unfairly because they have enrolled or stayed in the pension scheme
• Use inducements (such as pay rises conditional on opting out) to discourage pension membership

Penalties for Non-Compliance

The Pensions Regulator has enforcement powers for employers who fail to carry out re-enrolment:

The escalating daily penalties can accumulate quickly. For an employer with 50-249 employees, the daily penalty is £2,500. For 250-499 employees, it is £5,000. For 500+ employees, it is £10,000 per day.

Practical Considerations

Payroll Integration

Most payroll software includes auto-enrolment and re-enrolment functionality. Ensure your system can:

• Identify workers due for re-enrolment on the chosen date
• Generate the required worker communications
• Process opt-outs within the one-month window
• Submit information to your pension provider

Budgeting for Re-Enrolment

When workers are re-enrolled, the employer must make minimum contributions (currently 3% of qualifying earnings). If several workers are re-enrolled at once, budget for the additional cost. In practice, many re-enrolled workers opt out again, but you should plan for the scenario where they remain in the scheme.

Record Keeping

Employers must keep records of:

Communication

When re-enrolling workers, the communication must include:

• Confirmation of re-enrolment and the effective date
• The name of the pension scheme
• The contribution rates (employer and employee)
• How to opt out and the deadline for doing so
• Where to get more information about the pension scheme

Re-Enrolment vs Automatic Enrolment for New Joiners

Re-enrolment is a separate process from enrolling new starters. New employees who meet the eligibility criteria must be enrolled into the pension scheme within their postponement period (if one is used) or from their start date. Re-enrolment is a periodic exercise that reviews the entire workforce every three years.

Both obligations run in parallel. An employer must manage ongoing auto-enrolment for new joiners and the triennial re-enrolment exercise.

Common Mistakes

• Missing the re-enrolment window — The six-month window is strict; missing it leads to compliance action
• Forgetting the re-declaration — Even if no one needs re-enrolling, the re-declaration must be submitted to The Pensions Regulator
• Not updating payroll — Failing to set up deductions for re-enrolled workers from the correct date
• Discouraging opt-ins — Any attempt to persuade workers to opt out is a criminal offence
• Ignoring workers who reduced contributions — Re-enrolment applies not only to those who opted out entirely but also to those who dropped below the minimum contribution level