Employer

Section 5 - Automatic enrolment (AE)

  • All employers need to act to comply with the law;
  • Under AE, eligible employees will be automatically enrolled into the LGPS whether they wish to join or not;
  • LGPS Regulations require any employee under the age of 75 with a contract of employment of at least three months to be automatically enrolled to the Scheme;
  • Employees with a contract of employment for less than three months will not be contractually enrolled but will be automatically enrolled if they are an eligible job holder, although the employer can issue a postponement notice for up to three months and a day and can choose not to automatically enrol the employee if any of the optional exceptions apply;
  • Eligible jobholders have a right to opt-out (and if that occurs in the first three months the employee will receive a refund of their contributions less statutory deductions for tax and National Insurance);
  • An employee can only opt-out after they have been automatically enrolled and not before;
  • An employer with employees eligible for the LGPS is not able to offer any other pension scheme to their employees. The Government-initiated National Employment Savings Trust (NEST) scheme is not available to eligible LGPS employees; and
  • For a few employers, only some of their employees are eligible for the LGPS, such as employees who have been TUPE’d to them from another LGPS employer.

You must keep records of your AE activities. This includes the names and addresses of staff you've enrolled, records of when contributions were paid into a pension scheme, staff opt-in notices, a pension scheme reference number and information sent to the pension provider. This information is to be kept for a minimum of six years and opt-out notices for a minimum of four years.

You must also monitor the ages and earnings of new and existing staff and check their AE eligibility every pay reference period. As employees first become eligible, they will need to be automatically enrolled, unless one of the exceptions apply, and you must notify the Southwark Pension Services.

Additionally, you will need to write to those employees to let them know how AE applies to them as they become eligible.

As an employer you must put your eligible jobholders back into a workplace pension scheme on a three-yearly cycle. The automatic re-enrolment date can be chosen to be any date that falls within a six-month window, starting three months before the third anniversary of your original staging or duties start date, and ending three months from that anniversary.

Automatic re-enrolment is a repeat of the process that was carried out at your staging date, or duties start date. However, automatic re-enrolment only applies to eligible jobholders who have had an AE date with you as their employer and postponement cannot be used.

You don’t have to assess all of your workers to identify if any meet the eligible jobholder criteria. Instead, you must assess only the employees who are not currently in the LGPS.

On your automatic re-enrolment date, you must automatically re-enrol any eligible jobholders who are not currently members of the LGPS, unless one of the exceptions that amend the AE duty to be optional apply, in which case you can choose whether to automatically re-enrol the eligible jobholder.

As the employer, you must write to those employees who have been assessed and have been automatically re-enrolled within six weeks, telling them that they have been automatically enrolled, the date and that they have the right to opt-out.

When automatic re-enrolment has been completed, you must re-declare your compliance with the TPR and tell them how you have discharged your re-enrolment duty. The declaration can be submitted on their website.

The first re-declaration of compliance must be submitted within five calendar months of the third anniversary of the staging date (or duties start date) i.e. the re-declaration deadline does not change according to the re-enrolment date chosen by you.

As the employer, you must also continue with the usual monitoring process each pay reference period to identify what category of worker an employee falls within in relation to their contract of employment. If an employee becomes eligible to join the Scheme during the pay period, you must enrol them into the LGPS.

At the next automatic re-enrolment date, you must repeat the re-enrolment assessment and re-declare compliance with the TPR to tell them how you have discharged your re-enrolment duty. The re-declaration has to be submitted within five calendar months of the third anniversary of the previous automatic re-enrolment date chosen by you.

The initial AE duty does not apply where the eligible jobholder opted out of the LGPS in the 12 months before the AE date i.e. the employee must not be automatically enrolled, but this exception does not apply at the automatic re-enrolment date.

  • If the eligible jobholder has been given notice or has given notice of the end of their employment, and that notice was given before the end of the period beginning with six weeks from the AE date or automatic re-enrolment date;
  • If the eligible jobholder opted out in the 12 months prior to the AE date or automatic re-enrolment date; and
  • If the employer has reasonable grounds to believe that the eligible jobholder holds a protection from the Lifetime Allowance (LTA) tax charge. The LTA protections that can be held are:
    • Primary protection;
    • Enhanced protection;
    • Fixed Protection 2012;
    • Fixed Protection 2014;
    • Fixed Protection 2016;
    • Individual Protection 2014; and
    • Individual Protection 2016.