5 dos and don’ts for auto-enrolment
Auto-enrolment is going to mean wholesale changes to the way employers have to deal with workplace pensions. Neil Davies gives us a quick guide to five dos and don’ts that may help.
1. Plan ahead This is complex legislation and as a project for your business to deal with may take between 12-18 months. Start by finding the date you need to have a workplace pension up and running by this is known as your staging date. You can find this on the Pension Regulator’s website by using your PAYE reference number.
2. Engage with professionals, making sure you are compliant with the new legislation is very important, I would therefore recommend seeking professional advice. Fines are in place for non compliance with regulations and depending on the size of your business they can be hefty and far out way the fees attached with professional advice.
3. Let your employees know what’s happening, communicate to your employees how this is an added bonus to their current benefits package and should be seen as such.
4. Consider any existing pension arrangements you have, don’t assume that just because you currently offer a workplace pension scheme that it will meet all the criteria required for auto-enrolment.
5. Look into what help is out there. For those who don’t want to set up a company pension scheme, the government have set up a pension scheme called NEST (National Employers Savings Trust) into which employers can choose to pay contributions.
1. Ignore your duties, this legislation is not going to go away and taking no action is going to leave your business wide open to repercussions from the pension regulator.
2. Consider this as a one off, your business will have to constantly monitor your employees for changes in payroll which will affect the eligibility of your employees.
3. Feel as if you’re alone, every business in the country, no matter the size is also dealing with the issues associated with auto enrolment. Whatever the problem you may have another business will be having the same issue.
4. Encourage your employees to “opt out”. By encouraging your staff not to become member of the workplace pension on offer you would be in a major breach of the regulations and you can expect the regulator to hit you hard for such type of action.
5. Just assume NEST is the only option, it is a valid option, but it’s important to shop around and always seek professional advice first.
The above is by no means an exhaustive list. For further questions you should speak with a professional adviser.