Published by Rob Thomas on
Here we provide some pearls of wisdom based on our experience that will help employers preparing to set up their first workplace auto-enrolment pension scheme.
Sounds like a good idea but where to begin? Many professional advisers and providers can guide employers through the key steps and help to reinforce that the plan does not need to be overly detailed to begin with.
Many industry commentators will advise you to start planning twelve months in advance and indeed we were saying the same thing for the larger companies. However, a small employer should be able to make quicker decisions about key features relating to auto-enrolment. Added to this, professional advisers and auto-enrolment experts have built up considerable experience and developed more efficient ways of helping employers through the maze of auto-enrolment regulations.
Planning timescales in practice has reduced and many employers come to us with less than three months to go before they need to meet their auto-enrolment duties (this is also known as your ‘staging date’). Our shortest timeframe to date has been three weeks to implement a new auto-enrolment pension plan but we would not advocate employers to consider this as a challenge!
A significant number of small employers have associated businesses. Ideally, it is more efficient to establish an auto-enrolment scheme for all associated employers at the same time to avoid having to repeat the process. However, not all employers are prepared to do this because if the associated employers have different staging dates, it would mean bringing some of these dates forward to align with one another.
This may means increased costs for the businesses as they would then have an earlier duty to pay employer pension contributions for their workers. There are ways around this depending on the auto-enrolment scheme provider selected.
There is no doubt that an employer setting up their first auto-enrolment scheme will have to adopt some new internal procedures. These new procedures typically relate to HR (recruitment and induction), payroll (assessment, contribution collection and payment uploads), record keeping (data integrity) and Compliance (declaration of compliance, certification and re-enrolment every three years).
In isolation, each of these procedures do not generally present a problem but they can be easily overlooked and can fall into dis-repair when a key person is absent or leaves an organisation. An understated aspect of what we do is to act as the safety net for employers to remind them of their ongoing duties and timelines.
An easy mistake to make is for an employer to think that they have no eligible employees to enrol and sit back and do nothing. Such employers will need to inform The Pensions Regulator of the reason for not automatically enrolling any employees into a workplace pension scheme and employers are required to inform non-eligible employees how the auto-enrolment duties affect them.
*Source: The Pensions Regulator