6 December 2018

Most salons believe their responsibilities are to manage pension contributions for their eligible staff, to enrol new team members and remove team members who leave.  But three years after going live with pensions auto-enrolment there's a new hurdle for employers to jump over - the ‘triennial review’, the term used to describe compulsory pensions re-enrolment for some staff every three years. This applies to all pension schemes and employers can be fined if they don't comply.  

The three yearly pensions re-enrolment process typically means re-enrolling people who have previously opted out of their employer's pension scheme.  This is intended to encourage employees to think again about saving into a pension scheme, but obviously it's more work for employers. 

So what's involved?

Employers have to choose a date on which to assess all their staff to decide whether or not they meet the criteria and therefore need to be re-enrolled.  The date must fall within a 6-month window, from 3 months before to 3 months after the three- year anniversary of their original staging date.

Employers must keep a record of their assessments and they need to write to staff they have re-enrolled within 6 weeks of re-enrolling them.  Those employees then need to be added to the employer’s pension scheme so they can start making pension contributions. Employees then have one month after they have been re-enrolled to opt out if they choose.  And to finish off the process, employers must notify The Pensions Regulator that the triennial review has been done, even if the employer doesn’t have any eligible employees to re-enrol.

This sounds really confusing so we're running sessions to help employers through the process

Hilary Hall, NHBF's chief executive, said, "This sounds really confusing so we're running sessions to help employers through the process.  Bear in mind that pension contributions will be going up in April 2019 to a minimum of 8% with at least 3% contributed by employers. 

"Although final decisions have not yet been made, the Dept for Work and Pensions is also proposing to reduce the age when employees can be enrolled from 22 to 18 and for pension contributions to be calculated from the first pound earned.  At present earnings below £6,032 can be excluded from the minimum pension contribution."