It’s time to act on pensions auto enrolment!

It’s time to act on pensions auto enrolment!

As we mentioned back in October of last year, the clock is ticking if you’re not yet ready for the changes to workplace pensions. So I make no apologies for returning to the area of auto enrolment, which for many small and medium-sized enterprises (SMEs) will become a very significant reality during 2016 or very shortly into 2017.

Initially, we were warned that there were going to be huge numbers of businesses enrolling in workplace pensions during 2016, and that the vast majority of these enrolments will be SMEs. But was this a realistic expectation?

Going back some two years or so, the fees being quoted for set-ups of suitable auto enrolment-ready pension schemes were very expensive. But since then, more players have come into the arena and there are some far more reasonable set-up charges around, if you look around and do your homework.

Whether the forecasts of many employers not being able to enrol due to an overload of their systems will be borne out we will have to wait and see.

However, having carefully watched the process of auto enrolment it’s clear that there are a number of points to be aware of – and two areas in particular where your business will need to consider the impact of auto enrolment as soon as possible.

Is your business aware of its legal auto enrolment responsibility?

Despite the best attempts of the Pensions Regulator to educate employers, there seem to be a considerable number of business owners who are unaware of their responsibilities. The Pensions Regulator even went as far as creating Workie the workplace pension monster to try and raise awareness among business owners.

If you’ve not put any thought into how you’ll comply with the workplace pensions legislation, this is now something that should be at the top of your 2016 to-do list!

It’s not yet clear how the pensions regulator will treat small businesses that have failed to address their responsibilities. There are fines and penalties in place for not meeting your assigned staging date, but will there be some type of bedding-in period for small businesses? How strict will the Pensions Regulator be?

There’s a lot of work involved in getting ready for auto enrolment. It means researching and finding a suitable scheme, updating your payroll software to deal with pensions contributions (and the required recordkeeping) and making all your employees aware of the need to contribute to a workplace pension.

So the sooner you start, the more time you’ll have to complete the task – forward planning, as always, being the best course of action.

Have you factored auto enrolment costs into your budget?

Little has been said about the costs facing employers apart from the contributions they are required to make into the workplace pensions. But making contributions into your employees’ pension scheme is only one part of the associated costs.

To begin with, there’s the cost of obtaining professional advice regarding choice of scheme and assistance in being able to register a scheme. You’ll need advice from an independent financial adviser or pensions specialist when choosing a scheme, and your employees will need similar independent advice regarding their choice of investments once a scheme is chosen.

And there are also the payroll admin, HR and communications aspects of maintaining the scheme, all of which can bring additional costs to the table, not to mention the outlay for purchasing updated payroll systems and software.

So now’s the time to start working out those costs and factoring them into your budgeting and planning for the year.

We can help you get your auto enrolment solution in place

My feeling is that the hype surrounding auto enrolment will subside over time. It will become just another part of running a business and the administration of these schemes will be regarded as nothing out of the normal.

But the crucial point is that you should be actively looking to your professional advisers for assistance in meeting your workplace pensions requirements. Don’t forget, supplying a pension scheme for your employees is now a legal requirement, so it’s prudent to get the best possible professional help to meet your staging date on time (and with minimal fuss and bother).

At Caplan, we’ve done plenty of research into the market for suitable schemes. And we’ve identified the scheme that offers the best benefits, the easiest implementation and the most cost-effective solution for the smaller business.

We can help you shoulder the auto-enrolment burden, and provide a best-in-class scheme, helpful payroll advice and all the guidance you’ll need to meet your staging date with plenty of time to spare.

If you’d like to talk to us about your auto-enrolment needs, please do get in touch to arrange a meeting.