The beginning of February marks the date when mid-sized and smaller businesses will have to meet their obligation to have a pensions auto-enrolment scheme in place.
While businesses with over 250 employees will have made their plans well in advance to hit their deadline of February 1, many of the 40,000 businesses who will stage this year have their deadlines before the summer.
Whether your organisation is well on the road to implementation or just grappling with the challenge of auto-enrolment, here are some tips to make the project run.
1 Advice you will need it, so get it early.
No company will be able to make auto-enrolment happen without some external advice about the process and compliance of your proposed pension scheme. There will be high demand for this advice and the later you leave it, the more you can expect to pay. Start the process of finding an advisor early on and build the costs into the budget.
2 Work ahead of your deadline
Pensions auto-enrolment is a substantial project for every business. You will need to dedicate management time to planning, project managing and monitoring the process from beginning to end. If followed properly the process can be straightforward but areas like data gathering, finding the right advisers and communications can take longer than you anticipate. A number of the Pension providers are already starting to buckle under the pressure . Build wriggle room into your plans so you can meet your pensions staging date with room to spare.
3 Costs – don’t underbudget
Auto-enrolment will cost more than you think. The lesson from employers who have gone through this already is you shouldn’t expect employees to opt out so you need to anticipate making contributions for all qualifying employees. Equally don’t assume the minimum contribution will be right for your business. There will be a trade-off between what you have to pay as a minimum, what your competitors are doing and what your employees expect.
4 Project management – understand who’s involved
Rolling out your auto-enrolment scheme will involve more people than you think. Right upfront when you write your plan you should work out who you will need to talk to, how they will be involved, at what stage in the process and what do you need from them at each step of the way. Expect this list to include payroll, HR, finance, Pension providers, professional advisers, your management team and, of course, your employees. This should form the foundation of your communications plan.
5 Compliance and governance – get it right from the start
Auto-enrolment isn’t simply about providing a pension, it is about ensuring your employees have access to a qualifying scheme which you have taken steps to ensure meets their needs. The Pensions Regulator expects your business to comply with every element of auto-enrolment, from the choice of pension scheme to staff communication and the management and gathering of data. Make sure you understand all of your responsibilities before you start the project – the regulator will take action on those who take short-cuts.
Andy Philpott is sales and marketing director at Edenred – for more comment, insight and whitepapers visit www.edenred.co.uk/ehub
You call follow Andy on twitter @andy_philpott
