Now here is a point about Auto Enrolment that you might not necessarily know about, but cannot be stressed enough: the timings and wording as to how you communicate information about AE to your employees is key, and strictly set out by the government.
The odd poster in the staff canteen or ‘send to all’ email unfortunately will not cut it, and you can’t just send information once then file it in the ‘done’ pile.
Communications regarding the introduction of Auto Enrolment must be in writing, tailored to individual employees based on their eligibility category, contain required statutory wording, and be repeated at relevant junctures well beyond your staging date.
The good news is it’s really quite straightforward if you follow some key steps, and there’s plenty of help available.
It’s good to talk (or rather write)…
The Pensions Regulator advises:
‘One of your employer duties relating to Automatic Enrolment is that you are required by law to provide in writing – the right information, to the right individual, at the right time.
This includes all your employees (except those aged under 16 or 75 or over), which can include fixed-term contract employees, and not just those who want to opt out.’
So the writing’s on the wall: as an employer, you must explain Auto Enrolment and its implications to all your employees; individually, in writing and in good time.
This includes information on:
- pensions in general (you can’t assume all your employees know about them)
- what Auto Enrolment means
- relevant dates
- processes to follow
- contribution levels
- default investment options
- opt-out options.
If you’re concerned with saving the rainforests or simply your photocopying bill, it’s worth noting communicating ‘in writing’ does include email. It doesn’t however include posters, or signposting staff to a web-link or intranet article.
So when should I get scribbling?
You need to make sure you communicate with your workforce well in advance of your staging date (see my blog from July 10th). For smaller employers with fewer staff and less complex pension arrangements, you probably only need to talk to your team a few months ahead of your staging date; but if you have more complex calculations to make, or, for example, have trade unions to consider, you should start as much as a year ahead. The latest point I would recommend having all communications finalised is your final payroll before staging date.
And what should I say?
There will be some top-line information about pensions that you can circulate as a blanket communication. You might want to put together an information pack or leaflet – your scheme provider may have one, or there is guidance on content at:
Alternatively, use the Q&A sheet downloadable from the Pensions Regulator website:
However – and this is the important bit - there is also more specific tailored information that needs to be conveyed to each employee depending on whether they are an eligible jobholder, non-eligible jobholder, or entitled employee (see my blog from July 14th).
For those eligible, and therefore being auto-enrolled at your staging date, you need to explain what is being done (i.e. that from a certain date they will be automatically enrolled in a pension scheme, meaning contributions will be deducted from their wages and paid into the scheme unless they choose to opt out). You must then provide details of the specific pension scheme chosen, and information as to how to opt out should they so wish.
For non-eligible or entitled workers, you need to explain that they will not be automatically enrolled, but have a right to opt in or join the company pension scheme should they wish to. Non-eligible jobholders need to understand that they will have to make minimum contributions if they opt in; entitled workers must be told they are under no obligation to make any contribution but will probably find it beneficial to do so.
The Pensions Regulator website provide templates for these letters, which you can download here, to make sure you’re using the correct legal wording: http://www.thepensionsregulator.gov.uk/writing-to-your-clients-staff.aspx
Or of course, your pension scheme provider or an external pensions and payroll advisor like Cashtrak can help draft and check your communications throughout the process.
Make opting-out an option
Although termed ‘automatic’ enrolment, there’s nothing obligatory about it for the employee; they can personally decide to opt in or out, and you are prohibited from incentivising the decision either way.
You must make it clear that employees have one month from receiving their enrolment information to decide to opt out. This opt-out then stands for three years, at which point you must write to them again explaining that they will be re-enrolled unless they complete a new opt-out form.
As an employer you shouldn’t handle any opt-out forms yourself; employees should contact the pension scheme provider directly.
Avoid an awkward silence
Communicating with your staff about Auto Enrolment does not stop at this point; it’s an ongoing conversation stretching well beyond your staging date.
There are various junctures at which you need to provide further information, so make sure you’ve got these noted:
- If an employee moves from one eligibility category to another
- When you reach the end of an opt-out period, meaning the employee will be re-enrolled.
Untangle the jungle telegraph
All in all, it’s not as daunting as it sounds: with some planning and some top-notch copy-and-pasting from government resources, your employees will be fully informed and you’ll be completely covered.
And if you’d like some expert advice along the way, or someone to double-check your documents, get in touch to see how Cashtrak can help in ensuring your Auto Enrolment communications are more than a mere water-cooler rumour.