One of the mandatory, ongoing responsibilities for employers before, during and after switching on auto enrolment is to consistently and regularly communicate with staff about workplace pensions.
In fact, The Pensions Regulator’s (TPR) guidance is explicit about exactly which information must be given in which form by which date, linked to your staging date. It can’t just be a friendly natter over a coffee in the staff room - there are some very specific communication boxes to be ticked here.
Auto enrolment legislation requires businesses to communicate their workplace pension plans every step of the way to their staff or face fines.
For some small companies, this can be one of the hardest things of all to comply with. While many will outsource the pension selection and payroll functionality to external consultants, many are unaware that there are some very specific communication duties they are legally bound to undertake.
Good pension providers should supply you with letter and email templates – and others even provide customisable videos and posters which can gently introduce what’s happening in a clear and succinct way. TPR also has some stock letters that can be used.
We’ve used our expertise to create a simple set of tools that can help make this element of the legal burden easy to handle and with a technological wow factor.
So how does it all work?
- A good idea from the outset is to create a simple poster that can go up in the staff room or main working area about that fact that auto enrolment is on the way. It introduces the topic simply and gets people thinking. Smart Pension has created a simple customisable poster generator - but you could make your own adding the contact details of the person responsible and the pension provider you have chosen and its website
- Organise a staff meeting and explain what’s happening, which provider you have gone with and the next steps. You can put together a presentation on this or some opt to customize an existing video that takes you through the steps. Smart Pension’s tailored video can be created on a mobile phone and sent to staff electronically on the go, as well as being used in the traditional way as a helpful prop in a stand-up presentation
- Often it takes a while for the penny to drop. Some employees will absorb it right away and have several questions, others will put off thinking about it until nearer the time. It’s the employer’s responsibility to make sure staff are engaged and understand things fully. Consider targeted emails, informal notes in communal areas and lunch-time education sessions
- If you’ve postponed auto enrolment, you must write a statutory letter or email to staff to let them know. There are letter templates that can be downloaded for this
- Once you have assessed your employees, you must let them know the outcome. The letter to eligible staff must contain their auto enrolment date, your contribution level and the level of contribution they must pay. Employees that are not eligible must be written to explaining how they can opt in and that you will contribute to their pension
- When a member of staff opts out, it is only valid if it is in writing and it contains the correct information and that it is within the valid opt-out period. If it is not valid, you will have to write to them to let them know
- If employees opt in, you must write to them with exactly the same letter as before, outlining dates and contribution levels
- Each time you take on a new employee, the process must begin again and if they are eligible they must be automatically opted in and written to with the same information
- Every three years those that have opted out are automatically re-enrolled. Once you trigger this process, a letter should be generated automatically
- Notification of any changes: In April 2018, the employee contribution level goes up from 1% to 3% and the employer contributions rises from 1% to 2%. In April 2019, contributions are set to rise again for employees up to 5% and employers to 3%. This must be communicated to all employees
The responsibility for ongoing engagement rests with the employer, and the fine for not doing so is £400.
For more tips about how to complete auto enrolment, Smart Pension has published a free ebook with concise information about how to keep on top of your workplace pension duties. Download the free ebook here.
About Will Wynne
Will Wynne is co-founder and MD of workplace pension provider Smart Pension. Smart Pension is an advanced technology platform that specialises in offering auto enrolment for small and micro businesses.