Pensions legislation is undergoing one of the most significant changes in its history and as an employer you will be involved whether you want to be or not! As with recent changes such as RTI the burden of change is being hoisted on to the employer. For large employers, with significant resources, this can increase the costs of compliance, but for the smaller employer it can mean that already scarce resources are stretched to breaking point, or you as the employer have to add yet another task to an already full workweek.
Regardless of whether you agree with the auto enrolment initiative or not, there is one certainty – it will add to your business costs. Asides from the actual costs of the employer contributions, you will either need to allocate time and resources internally to deal with the administration of auto enrolment or pay a 3rd party to help you through the process.
As an employer you will need to have at least a basic understanding of your obligations, as the liability is with you to make sure that you are compliant.
During the course of our research, we have come across some astounding facts. There is literally a tsunami of auto enrolment activity building up and gathering pace. The first ripples have already hit the beach, but the big one is yet to come. Auto enrolment is already here and larger employers have been implementing auto enrolment since 2012. Up until now, the largest number of employers reaching their staging dates in any one month has been 12,000. This put a real strain on the administration capabilities of the pension providers. By mid 2016, 100,000 employers per month will be reaching their staging dates, so the wave is set to get a whole lot bigger!
Advance planning is a must. There are two key elements to auto enrolment – the pension scheme itself and the on-going administration of the employee assessment and auto enrolment into the chosen pension scheme. If you are concerned about how you are going to deal with either of these, please contact us.
Our next communication will give you more detail about the auto enrolment terminology, but there are a couple of things you can do in the meantime:
- In order to ease the compliance burden, communication with employees will be done by email. Therefore, if you don’t already have email addresses for all your employees, you should start to collect them.
- Think about the type of pension scheme which you wish to have. If you only want a scheme to fulfil your statutory requirements, then we can give you our recommendation. However, should you require something more sophisticated, you may need to enlist the help of a financial adviser. Please contact us if this is the case and we can put you in touch with one we would recommend. If you already have a pension scheme, then it would be worth checking with your provider to find out if it is compliant for auto enrolment.
Remember, we’re here to help.