Auto enrolment action plan
Don't get caught with your head in the sand!By Craig Hugo, Taylor Patterson.
With Christmas and New Year a distant memory, employers are concentrating on ensuring 2015 is a successful and profitable year. However in 2015, an increasing number of employers will have to comply with workplace pension reform legislation, also known as ‘auto enrolment’.During 2015 approximately 45,000 employers reach their “staging date”. This is the date allocated by The Pension Regulator, when an employer needs to have in place a qualifying workplace pension scheme in order to comply with the legislation. Complying with the new legislation, has both cost and administrative implications on employers.
With this number of employers staging there is likely to be a huge strain on the pensions industry, with many of the large scheme providers focussing on profitability and being selective in the employers they will offer a pension scheme. In order to ensure employers have a wide a range of providers to choose from, it is imperative that they plan early and decide on how they will comply.The following is our quick guide for employers, to ensure that auto enrolment doesn’t create a nasty surprise:
1. Plan earlyWe would recommend that employers give themselves at least 6 months prior to their staging date to begin their planning.
2. Know your workforceEnsure that your payroll data is clean and ready in terms of staff personal details and remuneration.
3. Understand the potential costsPutting aside the cost and time of administration, the cost of contributions will be a new company expense for many employers. There are a range of calculation methods available to employers in determining contribution levels for staff.
4. Review existing schemesEmployers may already have a workplace pension scheme in place, however, if the scheme does not meet the strict criteria required by legislators, it will not be deemed ‘Qualifying’ and will not satisfy auto enrolment obligations.
5. Consider the optionsWith a wide range of potential scheme providers, as fully independent financial advisers, Taylor Patterson can review the full market for you and provide recommendations of suitability.
6. Ongoing administrationEmployers have to be careful not to fall into the trap of assuming that successfully negotiating their staging date is the end of their obligations. In reality, a big step has been taken but the ongoing administration is arguably more onerous than the initial steps.
7. Staff engagementIt will cost employers to successfully meet auto enrolment legislation. Our advice to all employers would be to ensure staff engagement to generate a return on the investment and make certain employees understand the benefits of saving for retirement via the pension scheme.
Taylor Patterson have considerable experience in the auto enrolment process, having already assisted many clients in fully complying with auto enrolment legislation in an efficient and effective manner. Our auto enrolment services include financial impact analysis, payroll liaison and staff engagement packages, amongst others, to ensure that the different needs of different employers can be met.
With a wide range of issues to consider, it is important that employers give the time and resources to ensure the establishment of a pension scheme for their employees is dealt with professionally.