All businesses who employ staff will be aware from the adverts on television, the articles in the press, editorials online and the information letters they will have received from The Pension Regulator that they cannot ignore Pension Auto Enrolment.
So knowing about it and actually doing something about it is proving difficult for small employers. Its one of those tasks that takes time and keeps moving down the priority list but don't keep moving it for too long otherwise you will be one of those employers receiving a £400 fine for not having a pension scheme in place at your Staging Date.
So what are the 5 most important things you need to do before it is too late?
1. Know your Staging Date - enter your PAYE reference into the tool on The Pension Regulator website if you can't find the letter they sent you advising you of the date.
2. Choose and sign up to a pension scheme - you don't need an Independent Financial Advisor to do this. There are basic pension schemes provided by NEST, NOW Pensions, The People's Pension and the FSB (if you are a member) which meet the regulations.
3. Check your payroll software - it will need to be able to work out whether your employees are eligible, non eligible or must be auto enrolled and be able to produce reports in a format to be sent to your chosen payroll provider.
4. Prepare communications to your employees - every time an employee becomes eligible or is required to be auto enrolled you must write to them to tell them about the pension scheme you have chosen and how they can opt out or join.
5. Calculate how much the employer contributions will add to your current payroll costs and plan your cashflow.
Setting up a pension scheme is not straightforward. Just understanding the questions and terminology can make it confusing and whilst pension providers will have telephone support they will become swamped as 500,000 businesses set up their schemes over the next 12 months.
Whatever scheme you choose will involve set up costs, except for the government's NEST scheme which currently has no cost but also at the moment has a more limited choice of funds for employees to invest in than the others and does not allow transfers in or out.
HMRC's payroll software is not ready for auto enrolment yet so if you use this you will be required to do some manual work to produce the necessary information to assess your employees, communicate with them and to produce a report in a format to send to your pension provider. Sage Payroll users will need to purchase an additional module to deal with auto enrolment.
It is daunting for employers whether you have just one or more than 40 employees. Time researching and understanding is costly and nobody wants a fine because they just forgot to notify The Pension Regulator before the deadline.
Auto enrolment is a legal requirement for every employer but there is a simple solution.
We can help you with every aspect of auto enrolment and our integrated payroll service will ensure your employees are correctly assessed, communications sent and your pension provider receives information in the format they require.
The additional bonus is that if you choose to set up a scheme through us The People's Pension and NOW Pensions will charge you a significantly lower rate.
If you are one of those employers ignoring the adverts, the media and the letters because you just don't have time to think about it contact us now and we will make auto enrolment far simpler for you than you ever imagined.
Telephone Karen Reynolds on 01722 341820 now.