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Article | Pensions Briefing

Automatic enrolment: Staying compliant in a changing landscape

By Rudi Smith | March 11, 2022

We explore why automatic enrolment is so challenging and the importance of employers carrying out regular reviews to ensure compliance and avoid costly financial penalties.
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There has been a significant amount of change in the pensions landscape since automatic enrolment was introduced in 2012. Many employers have also experienced changes to the pension schemes they operate, including staffing, systems, and possibly structural changes, as well as dealing with the impact of the COVID-19 pandemic. With these changes comes a significant risk that their automatic enrolment processes and procedures no longer operate as originally intended.

Worse, for many, TPR has publicly ‘named and shamed’ some employers for their failures.”

The Pensions Regulator (TPR) has already issued over 450,000 compliance or penalty notices for employers failing to meet their automatic enrolment obligations. Fines can range from a £400 fixed penalty to escalating penalties that could be as much as £10,000 a day in extreme cases. Worse, for many, TPR has publicly ‘named and shamed’ some employers for their failures where it has deemed it to be appropriate to do so, which could seriously damage an employer’s reputation.

Since the easing of the pandemic restrictions, TPR has renewed its efforts to weed out non-compliant employers of all sizes and adopted new investigation techniques, such as short-notice spot checks on employers whom it suspects are non-compliant or are potentially high profile enough to merit a higher level of scrutiny.

The key questions for employers are:

  • Are you confident that your automatic enrolment processes are compliant?
  • If asked to do so, could you demonstrate this without undertaking significant amounts of work?

Why is automatic enrolment so challenging?

Automatic enrolment is a simple concept, but the rules surrounding it are extremely complex. Employers must ensure that they are taking the right action, for the right workers, at the right time. In particular they must:

  • Ensure that workers who satisfy certain minimum criteria (‘eligible jobholders’) are enrolled into a ‘qualifying pension scheme’ (see below) and are provided with appropriate information within a specified timescale.
  • Enable workers to opt into and out of the pension scheme if they satisfy certain criteria.
  • Operate a pension arrangement that satisfies minimum standards which, for a defined contribution scheme, requires a minimum level of contributions based on a prescribed definition of earnings or one defined under their own scheme rules.
  • Ensure that the scheme continues to ‘qualify’ by either carrying out a certification exercise (at least every 18 months for DC benefits) or undertaking contribution checks in each pay period.
  • Undertake a re-enrolment process every three years for certain workers who are not active members of the employer’s qualifying pension scheme.

Most employers go to great lengths and expense to meet their automatic enrolment obligations, but even the most well-run pension schemes can occasionally overlook an aspect that renders them non-compliant.

For example:

What can you do about it?

By undertaking a periodic automatic enrolment review, employers can become proactive rather than reactive in dealing with compliance issues, identifying and resolving any errors, and updating existing practices to ensure that they do not arise again. Similarly, a review could identify areas to improve the efficiency and effectiveness of existing practises.

Failing to address errors could be a costly and time-consuming exercise in the long-term and could result in regulatory intervention. A simple way to identify areas that might be worth further review is to spend an hour with one of our automatic enrolment specialists, talking through the employer’s duties and the operation of existing processes and procedures. This can potentially identify areas where if action is taken, significant time and expense further down the line can be avoided.

WTW has supported employers with its proprietary automatic enrolment review process. This can be aligned with the needs and objectives of the employer, from a high-level ‘light touch’ review to a detailed review. The detailed review process consists of six steps, and employers can choose to adopt some or all of them, depending on their requirements.

The six step automatic enrolment review process
Start with a challenge session
Employer role WTW role
Step 1 Understanding your automatic enrolment policy and any known issues. Look at the current policies and any known issues to determine the required review process.
Step 2 Agree scope and obtain information. Agree scope of review and gather information.
Step 3 Sample testing. Review of processes against agreed policies for sample data/membership. Full membership testing for known issues.
Step 4 Report and recommendations. Reporting on issues identified. Initial recommendations.
Step 5 Agree rectification process. Recommend process for addressing past issues and determining future processes.
Step 6 Implementation and correction support. Preparation and/or review of relevant documentation. Review of process implementation.


Employers should consider undertaking regular health checks (possibly every few years) and particularly after any significant changes in pension or payroll systems or key personnel. There is also increasing demand for employers involved in mergers and acquisition activity to undertake a review of any automatic enrolment risks as part of the process. Circumstances will dictate the best time for a review, but employers should consider the benefits of taking a proactive approach to compliance, given the long-term benefits of doing so.

Who should I contact?

If you’d like to hear more about how WTW can help you, please contact your WTW consultant or Rudi Smith at the contact details below.


Director, Retirement
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