If an employee’s active membership of a pension scheme ends, the employer must re-enrol the individual into an alternative Automatic Enrolment scheme. This process is known as “Immediate Automatic Re-enrolment” and includes deadlines which must be met. As a lesser known aspect of Auto Enrolment, it is worth understanding the four circumstances that can trigger Immediate Automatic Enrolment and how it can affect you:
There are situations where Immediate Automatic Re-enrolment does not apply. If an employer moves an employee from one eligible scheme to another, without a break in contributions, then automatic re-enrolment is not required. It also does not apply when:
- A worker has been paid a winding-up lump sum in the last year and then leaves employment but subsequently re-joins the same employer
- Termination notice
- An individual has Primary, Enhanced or Fixed Protection
Immediate Automatic Re-enrolment is a relatively obscure part of Automatic Enrolment legislation but it can still be a useful tool for employers. It can be used when an employer decides to move from one Qualifying Scheme to another. However, employers should be aware that other legal requirements must still be met e.g. contractual obligations must still be fulfilled.
If you believe Immediate Automatic Re-enrolment affects you (either as an employer or employee) or are simply interested in knowing more, please contact your Courtiers adviser and they will be happy to help.
Tuhin Ahmed BA (Hons), APFS, IMC CertPMI
Chartered Financial Planner
Warning – the views expressed by Courtiers in this summary and any video and video transcripts, are reached from our own research. Courtiers cannot accept responsibility for any decisions taken as a result of reading this document, watching the featured video or reading the video transcript and investors are recommended to take independent professional advice before effecting transactions. The price of stocks, shares and funds, and the income from them, may fall as well as rise. Past performance is not necessarily a guide to future returns.
We do not endorse nor accept responsibility for the content of any website not operated by Courtiers which you may visit by following a link from this article.