4.4.1 The Pensions Act 2011 places a requirement on all employers to identify workers who earn over the automatic enrolment earnings trigger, are aged 22 or over, and under State Pension age to be automatically enrolled into a qualifying workplace pension scheme. This includes temporary workers.
4.4.2 Automatic enrolment was introduced over a period of several years, starting from autumn 2012. Each employer had a date on which they had to begin the process of automatic enrolment. This is referred to as the ‘staging date’. The Pensions Regulator (TPR) wrote to the Permanent Secretary (or equivalent) of each employer approximately 12 months prior to their staging date to advise them to prepare for automatic enrolment. TPR also sent out a reminder approximately 3 months before the employer’s staging date.
4.4.3 The Civil Service already enrolled the majority of new entrants into a qualifying pension scheme, and the Minister for the Cabinet Office (MCO) decided that this would continue irrespective of the wider eligibility criteria in the legislation. This decision was extended to cover the automatic enrolment of all civil servants not in a qualifying pension scheme at the departments’ staging date and at the anniversary date (see following paragraph).
4.4.4 Workers can choose to opt out of the scheme once they have been automatically enrolled. However, under automatic enrolment legislation, departments must re-enrol all workers who are not currently in a pension scheme three years after the initial staging date and at every three year interval following this. This is known as the ‘anniversary date’. For those who have opted out of the Civil Service Pension (CSP) arrangements the section/scheme they should be enrolled into when they are re-enrolled will depend on whether they qualified for full protection (where they will return to their previous scheme), tapered enrolment (opting in before or after their tapered enrolment date will see them join their old scheme or alpha respectively), or have no protection (they will join alpha). The Scheme Administrator will be able to assist you in identifying which section of the CSP arrangements to re-enrol optants out into.
4.4.7 Employers will need to take the following actions:
4.4.8 Employers who participate in the CSP arrangements by virtue of being listed in Schedule 1 of the Superannuation Act 1972 (known as Schedule 1 bodies), are not covered by the MCO’s direction referred to in paragraph 4.4.3, above. They may, however, choose to adopt this policy for their own employees.
4.4.9 Employees who have opted not to join the CSP arrangements on joining service, or opted out during service and opened a partnership pension account instead, do not need to be automatically enrolled into the PCSPS or alpha. This is because partnership is a ‘qualifying scheme’ as defined under the automatic enrolment legislation.
4.4.10 EPN326 provided information about changes to the Lifetime Allowance and the implications of applying for fixed protection. To retain fixed protection in a defined benefit scheme, such as the CSP arrangements, the individual cannot accrue any further benefit. Consequently, the vast majority of those who have applied for fixed protection will have opted out of the CSP arrangements. When such people are automatically enrolled or re-enrolled into the scheme, they will have to opt out of the scheme again within one month of being enrolled, or (if later) within one month of their employer telling them that they have been automatically enrolled. Otherwise, they will build up benefits and may lose their fixed protection.
4.4.11 People who have opted out and have preserved benefits in the CSP scheme must also opt out within one month of being automatically enrolled, or (if later) within one month of their employer telling them that they have been automatically enrolled if they do not wish to build up further benefits in the scheme. This is because there is no minimum qualifying service required for those who already have preserved benefits in the scheme.
Where the member is eligible for alpha on automatic-enrolment, and does not opt out within one month, they do not choose to link their preserved service. This is an automatic process based on the length of the break in their scheme membership. Over 5 years is a 'disqualifying break', and the person’s pensions must remain separate; under five years is a 'qualifying break' and the pensions are linked automatically. Where the preserved award was in classic, classic plus or premium (or had an element of nuvos pension based on final salary), this is cancelled and recalculated at the time that the member leaves the scheme again and will be worked out on their final pensionable earnings at that time.
4.4.12 People who are in one-person pension arrangements (often operating by-analogy to the CSP arrangements) do not need to be auto-enrolled into the CSP arrangements. This is because they are already in a qualifying pension scheme.
4.4.13 If an employee transfers from one CSP employer to another, and they are in the CSP scheme or partnership, their membership of that scheme will continue unchanged. However, if they have previously opted out of the CSP scheme and not joined partnership, the new employer must automatically enrol them into the section of the scheme they previously opted out of or alpha depending on whether they qualified for full protection (where they will return to their previous scheme), tapered enrolment (opting in before or after their tapered enrolment date will see them join their old scheme or alpha respectively), or have no protection (they will join alpha). The Scheme Administrator will be able to assist you in identifying which section of the CSP arrangements to re-enrol optants out into. However, this does not apply if the person is only on loan from their parent employer.
4.4.14 Therefore, it is essential that the transferring employer advises the new employer which section of the CSP arrangements the individual opted out of previously. In the absence of this information, they should advise what date the individual commenced Civil Service (or Schedule 1) employment, and the date they opted out of the scheme.
4.4.15 As stated above, in order to ensure compliance with automatic enrolment legislation, when an employee transfers between departments, the importing department must ensure that the worker is in a qualifying pension scheme from the first day of employment in the importing department, if they are not already in one.
4.4.16 To help with this, the form employers complete when transferring employees to another employer covered by the Civil Service pension arrangements has been revised. This form can be found in Annex 6B of the Employer’s Pension Guide.
4.4.17 The revised form (OGDTF1) is designed to facilitate the necessary change to current practices. OGDTF1 form is not intended to go via the Scheme Administrator but should instead be sent directly from exporting to importing department.
4.4.18 Departments should consider their internal security procedures when sharing personal information with other departments, and ensure that the employee has given their permission for this data to be shared.
4.4.19 If an employee opts out of the CSP arrangements after being automatically enrolled on their department’s staging date, whilst below age 22 and earning less than the specified minimum, they must be automatically re-enrolled once both of these criteria are met:
4.4.20 All employees who have opted out of the CSP scheme, and have not joined an alternative qualifying scheme, must be re-enrolled by the employer periodically. The default position is that re-enrolment will take place on the third anniversary of the employer’s staging date. However, employers do have some flexibility as to their exact re-enrolment date (further information is available from The Pensions Regulator’s website).
4.4.21 After the introduction of alpha on 1 April 2015, a member should be enrolled into the scheme they are eligible to join on the staging date. This will depend on whether the member previously qualified for full protection in the PCSPS (where they will return to their previous scheme), tapered enrolment (opting in before or after their tapered enrolment date will see them join their old scheme or alpha respectively), or have no protection (they will join alpha). The Scheme Administrator will be able to assist you in identifying which section of the CSP arrangements to re-enrol optants out into.
4.4.22 To ensure that the opting out process can be managed and monitored and any automatic enrolment obligations met, a revised single opt out process has been introduced.
4.4.23 The employer is now responsible for taking appropriate and timely action to process requests from members to opt out of the CSP arrangements, before passing information to the Scheme Administrator to update their records. The single opt out process applies regardless of which scheme the member wishes to opt out of, or their reason for opting out. Please see section 5 ‘Opting Out’ (paragraphs 5.9.3 to 5.9.8) for more information about the opting out process. Annex 5D sets out the refund process.
4.4.24 In addition to the obligation employers have to inform employees about automatic enrolment and the date on which employees have been automatically enrolled or will be automatically re-enrolled, employers should also let members know what other actions they might need to take. Employers should tell employees automatically enrolled that they may need to complete a death benefit nomination form.
4.4.26 There is an automatic enrolment factsheet for members under publications that gives an overview of automatic enrolment and what it means in the Civil Service.
4.4.28 The model appointment letter texts provided in Annex 4B were amended to reflect automatic enrolment following its introduction.
4.4.29 The contents of Starter Packs sent by employers have been updated in line with automatic enrolment. Generic statements about automatic enrolment are included in the main scheme booklets. The Pension Choices forms: NE1 and RJP were updated to include text about automatic enrolment. The NE2 form is now obsolete.
Please note: the revised Pension Choices form NE1 no longer gives new starters an immediate choice of not joining a pension scheme. Employees who do not wish to join or want to opt out will have to complete an Opt Out form and follow the process set out in Section 5.9 - Opting out.
4.4.30 Departments will continue to send starter packs (and Pension Choices forms) alpha full, NE1 or RJP as appropriate.