Auto enrolment clinic: The importance of advice
You wouldn’t amend employment contracts or implement new health and safety procedures without seeking advice first, so why would auto enrolment be any different?by Angelo Kornecki, Astute Wealth Management.
Auto enrolment has many moving parts and is a positive step forward. But it is a full time commitment and does not stop once you have a suitable pension scheme in place.One of the biggest under estimations in all of this is the time it takes to plan and prepare. It is crucial to understand that this is far more than just a pensions issue and encouraging people to take responsibility over their retirement plans is only the tip of the iceberg.
Employers must put in place a suitable qualifying pension scheme and enrol all eligible employees into it and manage all the administration that follows on a monthly/weekly and annual basis.Most employers simply do not have the time, the knowledge and understanding or the resources, and why should they? Workplace pensions can be complex and the new legislation is far from simple.
Common questions I get asked are; how do I know which suitable pension provider to choose? What is an eligible employee? How much do I have to contribute and when? What happens if I have multiple payrolls (weekly and monthly?) How much is this going to cost me on an annual basis? What are my on-going obligations? And the list goes on and on.Can you afford to get this wrong?
The financial penalties imposed by the regulator are staggering; in some instances it can be thousands per day. Choosing your contribution basis without seeking any help or advice could end up costing thousands in contributions that you may not have had to make. By seeking professional advice, one client with 150 employees is now set to save £37,000 per annum.