Three tips for getting auto-enrolment ready

Three tips for getting auto-enrolment ready

Up to half a million small and micro employers risk escalating daily fines from the Pensions Regulator for failing to set up a workplace pension scheme this year. Here, experts from next month’s Workplace Pensions Live event give some tips on preparing for auto-enrolment

Three tips for getting auto-enrolment ready

  1. Prepare early
    For small businesses tackling auto-enrolment, the benefits of planning ahead shouldn’t be underestimated. The regulator recommends employers start planning at least 12 months ahead of their staging date.
    Companies that leave auto-enrolment to the last minute will find themselves with limited provider choice and greater administrative stress as well as possible fines.
    Executive director for automatic enrolment at the Pensions Regulator Charles Counsell said: “We are concerned that a minority of smaller employers are leaving things too late and struggling to comply on time.”
  2. Evaluate current providers
    Companies that already have a pension scheme may think that their work is already done. However, as not all schemes qualify for auto-enrolment, companies need to check whether or not their arrangement meets the criteria laid out by the regulator.
    Employers setting up a new scheme should research providers carefully. The three main things they may want to consider are durability, value for money and whether a scheme is well run.
    It is also worth dealing with current payroll providers to find out what auto-enrolment support they offer and which pension providers they work with as this can avoid unnecessary hassle and complications further down the line.
  3. Get data up to scratch
    One of the most common hurdles for small businesses is poor data. Taking the time to ensure that payroll data is refreshed can avoid a lot of complications and help to identify who needs to be auto-enrolled.
    1. Under auto-enrolment legislation, currently being rolled out, every employer in the country will have to put their staff into an approved pension scheme.

      Despite frequent warnings, however, there is evidence that smaller employers are missing their deadlines to comply with this legislation in increasing numbers.

      Of the companies that signed up with workplace pensions provider NOW: Pensions in the first quarter of 2016, over a third (37%) completed their application either very close to their staging date or after the deadline had passed.

      Morten Nilsson, CEO of NOW: Pensions said: “When it comes to auto-enrolment, it’s becoming clear that there are two distinct categories of employers – the conscientious and the oblivious.  Despite constant cajoling, some employers are still leaving auto enrolment dangerously late risking fines and increased administrative pressure.”

      The regulator is not pulling its punches with businesses that fail to comply.

      The number of employers facing a £400 fine reached 1,594 by the end of 2015, up from 169 in 2014. Alarmingly, 1,021 of these fixed penalty notices were issued in the period from October – December alone.

      The number of escalating penalty notices (a fine of between £50 and £10,000 per day) for failure to comply with a statutory notice) also rose from seven to 31 in the same period.

      Small businesses the want to avoid the wrath of the regulator must ensure that they start planning sooner rather than later.

      Employers can find out more about auto-enrolment and all the latest developments in workplace pensions at Workplace Pensions Live, a two day conference taking place at Edgbaston Stadium on 11 and 12 May. 

      The event is free to attend for pension scheme decisions makers from employers, including HR directors, pension managers, scheme trustees and finance directors. You can find out more and book at www.workplacepensionslive.co.uk