If you haven’t heard of Auto-enrolment yet, you will.  You can't ignore it.

Every employer in the UK will be affected.  You’ll be required to enrol all employees that meet certain criteria into a pension plan and contribute to their pension, but that’s not all. There are a number of other duties placed on employers which you will be required to comply with.

At Feel Good About Money we have solutions that mean you can stay focused on building your business – not running your pension scheme.  

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For further information & to get you started, book onto one of our FREE Seminars "Get ready for Auto Enrolment".

Auto-enrolment is currently being phased in for all UK Employers.

Unlike many previous Government legislative changes the new rules apply to all UK employers regardless of their size, as such all businesses will be affected at some point leading up to April 2017.

For some this will be sooner rather than later!

A report prepared by the CEBR predicts that businesses with up to 500 employees will have to commit up to 103 man days to deal with the additional paperwork created by the Government’s new legislation and could be faced with set up costs of as much as £28,300.

 

CAN YOU IGNORE IT?

As with any new legislation, you can choose to ignore it – but it is not advisable.

Non compliance brings with it significant potential fines.

For this year these fines can range from £2500 - £5000 per day for non compliance.

IF I HAVE AN EXISTING SCHEME, DO I NEED TO DO ANYTHING?

Yes, unfortunately there is still work that will need to be done by you to comply with the new rules. You also need to review employees who are not members of any scheme you may have in place.

 

So, even if your scheme is auto-enrolment compliant you will need to take action.

Depending on your own situation there could still be a considerable amount of things you need to do or put in place.

 

WHAT ARE THE NEXT STEPS?

1. Find Out the date you need to comply (your staging date)

 

Employees*

Date 

 

Employees*

Date 

350 - 499

1st January 2014

 

59

1st November 2014

250 - 349

1st February 2014

 

58

1st January 2015

160 - 249

1st April 2014

 

54 - 57

1st March 2015

90 - 159

1st May 2014

 

50 - 53

1st April 2015

62 - 89

1st July 2014

 

40 - 49

1st August 2015

61

1st August 2014

 

30 - 39

1st October 2015

60

1st October 2014

 

 

 

 

Fewer than 30 PAYE employees - 1st June 2015 - 1st April 2017 (depending upon your PAYE reference number).

The dates above are for guidance only, as there are complexities even with this part of the process. You should find out your own specific staging date by visiting www.thepensionsregulator.gov.uk/employers/tools/staging-date.aspx

* Number of PAYE employees

 

2. Start preparing

Complying with auto-enrolment is complex. You need to start the process early so that you can put in place a solution that is right for your business and for your employees. There are 38,000 companies that have to meet the new auto enrolment regulations this year so getting your solution in place early is critical. 

Being able to choose the best solution for your business is likely to be very challenging if you leave it too late, worse still you may not be able to meet the deadlines which could result in your business being fined.

 

 

3. Identify the costs

These can be split into two areas; the direct costs of actually paying contributions on behalf of your employees and the time cost of preparing and meeting your new responsibilities.

The employee contributions you are required to pay increase as we get closer to October 2018 by which time they are around 3% pay. The time cost associated with auto enrolment will vary depending on how you meet your requirements and if you decide to undertake a lot of the work internally or find an outsourced solution.

Be warned, to undertake the work internally there are over 250 pages of guidance that the Pensions Regulator has issued that you would need to work through and more importantly understand!

 

4. Categorise your workforce

You will need to categorise your workforce into three bands, eligible jobholders, non-eligible jobholders or entitled workers.

Each category has different entitlements under auto-enrolment rules. This is a critical part of the process and one that continues every time you run your payroll after you have past your staging date.

 

5. Communicate with your employees

It's not just the company that is affected by the changes - this will have an impact on every member of your staff. How you communicate with them will determine whether or not this is a smooth process or an HR disaster. There are many communications you have to provide as a statutory requirement so getting this part of the process right will go a long way to determining the number of phone calls and queries you will get from your workforce.

 

6. Put systems in place to comply with the rules

There's a misconception that auto-enrolment is just about setting up a pension scheme, however, that's only a very small part of it. The biggest challenge for businesses will be the ongoing monitoring, reporting, record keeping and compliance associated with auto-enrolment and ensuring that all members of the workforce are being treated correctly and communicated with appropriately every time you run your payroll.

The only way to successfully achieve this is to ensure you have the appropriate systems in place that take care of all of this for you in an automated way. This is a far bigger consideration than setting up the pension scheme itself.

 

7. Keep it simple

There is a danger that trying to understand and implement all of this could take up a disproportionate amount of time for a business owner and in many cases it could end up costing a lot more than it needs to.

Nominating a dedicated auto-enrolment "champion" within the business is a good start. This could be the HR Manager or one of the Directors of the business. They can work with an auto-enrolment specialist to come up with a clear implementation plan, roll out the communications to the team, set-up the scheme and sort out the ongoing systems.

Don’t worry – we can help.   Get in touch…..

 

We have a solution, which is designed to do what it says. I can offer you advice and support for every step from assessing your workflow to putting a scheme in place to the ongoing management.

 

And that's not all...

This solution could also save you money, depending on your circumstances. It uses a Government approved process that’s been adopted for many years by large employers to significantly reduce their pension scheme costs.

 

For example, if you have 250 employees you could save over £35,000 every year from 2018 onwards (based on national average earnings).