46.Section 4 amends sections 2, 5, 6 and 54 of the PA 2008. Under section 2, where the jobholder is an active member of a qualifying scheme, the employer must not take any action or make any omission by which the jobholder ceases to be a member of the qualifying scheme, or the scheme ceases to be a qualifying scheme, unless a specified exception applies. One of those exceptions is where the employer arranges for the jobholder to become an active member of another qualifying scheme, within a prescribed period. (The definition of “jobholder” is set out in section 1 of the PA 2008.)
47.As section 2 stands, there is no duty on the employer to automatically re-enrol the jobholder into another qualifying scheme, where the employer takes an action or makes an omission as referred to in paragraph 46. The employer can put the jobholder into another qualifying scheme but only with the jobholder’s consent. In the event that this consent is not forthcoming the employer could potentially be in breach of section 2 of the PA 2008 until the next automatic re-enrolment date arose.
48.Subsection (1) amends section 2 of the PA 2008 so that section 2 is not contravened if, in compliance with the duty to re-enrol under section 5, the jobholder becomes an active member of an automatic enrolment scheme from the day after the day on which the jobholder ceases to be an active member of a qualifying scheme or the scheme ceases to qualify. Alternatively, the Secretary of State may prescribe a period of time for re-enrolment if he or she considers it appropriate to do so.
49.Subsection (2) inserts new subsection (1B) into section 5 of the PA 2008. Section 5 substitutes a new subsection (1) into that section. Section 5, as amended, imposes a duty to re-enrol a jobholder in the circumstances specified in new subsection (1) or (1B), with effect from a date specified in regulations.
50.Subsection (1) of section 5 of the PA 2008 (as substituted) applies to a jobholder who earns more than £7,475 and who fulfils certain other conditions. Subsection (1B) applies to a jobholder who earns £7,475 or below, where the jobholder has ceased to be an active member of a qualifying scheme by reason of an action or omission by a person other than the jobholder.
51.Subsection (2) also inserts new subsection (1A) into section 5 of the PA 2008. Subsection (1A) applies to a jobholder who earns £7,475 or below, where the jobholder ceases to be a jobholder for a period as a result of the conditions in section 1(1)(a) or (c) of the PA 2008 not being met.
52.Subsection (3) substitutes a new subsection (4) in section 5 of the PA 2008 (circumstances in which the duty to re-enrol does not apply) to allow for regulations to prescribe the circumstances where there is no duty to re-enrol in a case where:
the jobholder, or the employer at the jobholder’s request, takes an action or makes an omission such that the jobholder is no longer a member of a qualifying scheme; or
the jobholder opts out of membership of a qualifying scheme, under section 8 of the PA 2008.
53.Subsection (4) removes the reference in section 5 of the PA 2008 to re-enrolment having to occur “after the automatic enrolment date”, given that re-enrolment of a person aged under 22 would occur before the jobholder’s automatic enrolment date.
54.Subsection (5) amends section 6(4) of the PA 2008. It amends paragraph (a) to remove a reference to re-enrolment having to occur “after the automatic enrolment date” and to remove an unnecessary reference to a scheme ceasing to be a qualifying one. It amends paragraph (b) consequent on the amendments made by subsections (1) and (2) and section 5 and amends paragraph (c) consequent on the amendment of paragraph (a).
55.Subsection (6) ensures that where an employer induces a jobholder to leave or opt out of a scheme, the employer must arrange for the jobholder to be enrolled in a replacement scheme without leaving a gap, in order to avoid possible compliance action for breach of section 54 of the PA 2008. In practice this would ensure that the jobholder has continuous pension saving. Alternatively, the amendment would allow for a period of time to be prescribed if the Secretary of State considered it appropriate to do so.
56.Regulations under section 5 of the PA 2008, as amended by the Act, will therefore be able to provide for a duty to re-enrol to occur whenever the employer takes an action or makes an omission as referred to in paragraph 46, subject to any exceptions that may be provided for.