Auto Enrolment - are you ready?

It feels as though Auto Enrolment has been with us for a long time, but it’s only now we’re in 2016 that it is becoming a reality for many small businesses. Despite this, and even with the Government’s recent advertising campaign to increase awareness of Auto Enrolment, for many business owners it is just another problem waiting to be ticked off their ‘to do’ list. With The Pension Regulator having authority to raise hefty penalties if staging dates (when you need to have your scheme in place by) are missed or Auto Enrolment is not dealt with correctly, businesses must act now, but we’re still seeing many clients who just don’t know where to start to get a pension scheme set up and the payroll work dealt with.

A reminder of what it’s all about

The government has introduced Automatic Enrolment to ensure people provide for their retirement. Every employer in the UK will automatically enrol eligible workers into a pension scheme and collect and pay over their pension contributions to a recognised pension provider.

So what do I need to do?

The first step is to find out when your staging date is, which you can do using your PAYE reference. For businesses with staff numbers less than 50, these dates are happening anytime from now up to February 2018.

The next step is to select a pension scheme provider for your business. For a thorough review of the pension market and a detailed analysis to see what scheme is best for your staff, you will need to speak to a financial advisor who can talk you through the various options and decide with you which pension provider to use.

Alternatively, as a payroll provider, we have sourced a default scheme that our clients can use which removes the cost and time of appointing a financial advisor to find a scheme for you. That said, although our scheme will meet your Auto Enrolment compliance, there is no guarantee that it is the best scheme for your staff. Either way, it is key to get sorted sooner rather than later, as a large demand for schemes is expected and, if you leave it too late, you may have little choice over what provider you can have.

And then there’s the administration....

Unfortunately, setting the scheme up is just the beginning. Once a scheme is in place, and auto enrolment has been communicated to your staff, the administration of auto enrolment kicks in. It will be down to the employer to assess the workforce on every payroll run and decide who should be auto enrolled or re-enrolled and keep the employees informed with letters detailing the reasons for auto enrolment and the contributions to be deducted.

The cost – more than just contributions

Contributions are currently 2% of which a minimum of 1% will need to come from the employer and from 6 April 2019 this rises to 8% with a minimum of 3% from the employer.

In addition to the increased payroll cost of the contributions themselves, employers will need to budget for adapting their payroll processes to support auto enrolment. You may have the resource to cope in-house, otherwise you’ll need to outsource compliance to a payroll provider or look to use your pension scheme’s software.

How we can help

As a well-established payroll provider, we can help with:

Putting you in touch with a reputable financial advisor who can advise on the best scheme for your business
Setting up your auto enrolment scheme (one option only available)
Provide a seamless payroll and auto enrolment monthly solution from as little as £50 per month
Work with you to transfer your payroll from weekly to monthly to reduce the cost of dealing with auto enrolment each payroll run
Deal with all communication to your staff for auto enrolment and keep an audit trail of the communication, as needed by The Pension Regulator

If you want to discuss further how we can help you with auto-enrolment contact Debbie Boulton