Re-enrolment and the new marketplace

Most of the headlines written around Auto-Enrolment (AE) are rightly focused on the legions of smaller employers who are yet to comply with this new pension legislation. Such stories are of course necessary, yet they perhaps gloss over the needs and requirements of those employers that have already successfully navigated the first stages of AE compliance.

Employers that have already undertaken Auto-Enrolment need to continue to comply with the legislation at every pay date, and many will have overlooked the requirement to undertake a Re-Enrolment exercise every three years. We have written about this before on our blog, but for those new to this topic the guidance on Re-Enrolment from The Pensions Regulator can be read here.

The bottom line is that employers will need to revisit the entire process on a regular basis. This may well be another onerous duty to undertake, yet the savvy employer will also use this opportunity to instigate a wider review of their Auto-Enrolment processes and decisions made to date.

Examples of where this may apply will be varied. For instance some employers used an existing pension provider purely as a result of time or monetary constraints – or just for consistency and convenience – but have since found that provider or scheme wanting in some key respect. Other employers may be concerned about new legislation changes (not least the access to retirement investment options in the post Pension Freedoms world) and whether their current scheme can adequately meet these requirements. And many employers will want to change their overall communications strategy around pensions and AE now that they have more time to look at these issues.

Any or all of these items could suggest that a regular review of the employer’s selected pension scheme and services may become the norm. For many it would make sense to include such processes within the Re-Enrolment window as well. This has led to the suggestions that a “secondary” marketplace will now emerge to support such reviews.

It is early days for such a proposal, yet it will be interesting to see how newer pension schemes and service models compare to those instigated in the early days of Auto-Enrolment. We would however urge employers to take detailed advice before embarking on any change of provider to ensure that the change is indeed beneficial to employer and employee alike.

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For the full original article and other similar posts, please visit the Jelf Group blog.