Today is Pensions Awareness Day. Its primary aim is around the importance of saving for the future, and is designed to make people more aware of pensions, why they need them and to answer many of the questions people have. A commendable aim as increasing the general public’s awareness of pensions is a vital step in getting Britain saving.
While devoting one day to member perceptions of pensions is certainly a good thing, I’m concerned that there is not enough focus on awareness of auto-enrolment amongst employers. Employers’ awareness of pensions may have been adequate before now - some may even have used pension arrangements such as SSASs to aid investment into their business – but in many instances, we find that awareness of some of the details of auto-enrolment is still lower than it really should be.
This is of course with respect to both those employers who have yet to go through the process (some of the smallest employers have of course not yet auto-enrolled their staff) and those employers who have staged, but may not be fully comfortable that they are fully complying with the legislation.
The key message for employers who have already staged is that although an employer may have been through the auto-enrolment process, awareness of the rules needs to remain high. Auto-enrolment may have been treated as a project (the transactional nature of business between some advisers and their clients on this piece of work only serves to reinforce this), but it should be remembered that the rules around auto-enrolment do change from time to time – the easements at the start of the year being a good example.
"Focusing on the correctness of processes going forward is key – and perhaps auditing the decisions around auto-enrolment to date could be a wise step"
The population of UK plc has also had to get to grips with actually using the new flexibilities first announced in last year’s Budget. But what does this mean when considered alongside auto-enrolment? For some, it seems obvious that an individual is not concerned with continual saving, if they have just exhausted their pension fund to get that new conservatory installed! A common sense approach to some may not tally with the auto-enrolment rules and regulations.
Also, from time to time, key personnel within payroll and finance teams (i.e. those burdened with the responsibility of ensuring ongoing compliance with the law) could change too. Focusing on the correctness of processes going forward is key – and perhaps auditing the decisions around auto-enrolment to date could be a wise step, should there be any uncertainty around how the process has been carried out to date. For example, have the easements been understood and integrated into each employer’s processes correctly?
Why take what could be a costly risk on auto-enrolment compliance? Pensions Awareness Day is certainly a positive initiative for members, but perhaps we also need an ‘Auto-Enrolment Awareness Day’ for employers as well?