Auto enrolment – Top tips for businesses planning for their workplace pension scheme
Auto-Enrolment is fast approaching for many businesses, a lot of which have no experience in dealing with pensions or indeed setting up a pension scheme. Assured Wealth has come up with some tops tips to make sure that your business is ready for Auto-Enrolment.
First of all, planning is essential in Auto-Enrolment and the extent of the amount of planning required shouldn’t be underestimated. It is recommended by The Pensions Regulator that businesses should start planning 18 months before their staging date but many have ignored this advice which has resulted in penalties and fines. 600 businesses alone were fine a total of £66K in quarter four of 2014. Leaving it until the last minute will result in less choice between pension providers, increased admin, higher fees and a lot more stress.
You should also remember that if you already have a pension provider you must speak to them in advance to ensure that the existing scheme qualifies for Auto-Enrolment. Also, ask whether they will extend the scheme to all employees with the same terms as many providers are being selective about their Auto-Enrolment business.
It is advisable for small firms to seek help from a financial adviser when choosing a scheme as they will be able to help you identify which ones are best value for money and most suitable for your business’ individual requirements. If you outsource your payroll, contact your payroll provider to find out what support they can offer and what pension providers they work with as this could save you money. Furthermore, all of your payroll data needs to be up to date and accurate to avoid problems when it comes to the implementation stage of Auto-Enrolment.
Don’t forget that each month you run payroll, the assessment of all staff has to take place and records kept. There are 17 different letters to be issued to employees depending upon their age and income. Keeping records indefinitely in a safe environment will help if you have a Pensions Regulator inspection. The cost for the auto enrolment compliance software varies from company to company. You should NOT be paying more than £1 per employee per month for the software though.
In terms of fees for implementation, this depending on the amount of work you wish your adviser to do. We cap our fees at £1495 plus VAT. This includes setting up the scheme, liaising with the trustees on your behalf, running a seminar for all employees explaining the process and how it works and also an initial costing exercise to show you which solution to use to save you money.
Auto-Enrolment can also be used to give you competitive advantage. If you offer to give employers more than the legislative minimum then you may be able to attract and retain a skilled and motivated workforce.
If you need any advice on Auto-Enrolment or would like help with the planning and implementation of it, contact one of our advisers today who will arrange a consultation to discuss your requirements.