Auto enrolment will present a big challenge for small to medium sized companies!
One of the biggest changes to our pension system started over 2 years ago when employees of larger companies started being auto enrolled into pension schemes.
Now is the biggest challenge yet to auto enrolment, as small and medium sized employers reach their staging dates. For many of these companies, it may be the first time that they have put a pension scheme in place for their employees.
The implications are daunting for any business, so understanding the costs involved and planning ahead is essential. The employer will need to navigate a number of tasks that are both complex and time consuming and there are also very real dangers if things go wrong.
All employers will receive a letter from The Pensions Regulator (TPR) a year in advance of their staging date. This outlines the employer’s statutory responsibilities and duties of which there are approximately 238 and also the penalties that apply should the employer not comply with the rules. No employer wants the worry of sorting things out at the last minute, so here are some key check points to help you prepare ahead:
Nest or private pension? Make a decision on what scheme is right for the company.
Prepare early if you have decided to get support: There are very few pension providers in this market and some already have capacity issues. You must have applied within 6 months of your staging date so seek advice early!
Scheme design: Part of the auto-enrolment analysis is to check whether there is an existing qualifying scheme which can be extended to all employees or is a new scheme required?
Project plan: Create a plan to outline the workload and the timescales for delivery.
Worker assessment: Fully understand what your legal duties are for the different types of worker you employ.
Communicate changes to your workforce: You have legal responsibilities to tell your workers what’s happening and why and what it means for them.
Administration: The work doesn’t stop once you’ve started enrolling workers. Find out what’s involved to fulfil your ongoing obligations.
To find out more about auto enrolment and what the changes mean for your business, we recommend you speak to a professional adviser. For further information contact Invicta IFA on 01622 662636 for a no obligation discussion.