Pensions – Can you comply?

Pension

Pension Schemes

Auto Enrolment – Can you comply?

A new law means that every employer must automatically enrol workers into a workplace pension.

This is called ‘automatic enrolment‘ and is the biggest shake up to workplace pensions in a generation.

In addition to the cost of contributions, the new duties placed upon employers will have an enormous impact upon payroll and HR functions and will require an ongoing stream of communication with employees. Few employers realise that their pension provider will need around 40 pieces of data to ensure compliance and that the enrolment procedures will apply every time that payroll is run!

Employer’s need to be clear about which employees have to be enrolled and the communications required across the whole workforce. Where there is an existing pension plan in place, further decisions are also needed regarding the level of on-going contributions and whether to operate a two-tier system.

Add to this the demand placed on pension providers and advisers to accommodate the unprecedented number of new schemes and there is no guarantee that an existing pension scheme provider will be willing to accept the whole workforce on the present terms.

With hefty fines for non-compliance it is easy to see why the Pensions Regulator and all industry commentators are insisting that early planning and preparation is key.

An example high level plan for the auto-enrolment project is provided below:

Time until Staging
Date                                             
Actions
15-18 Months Agree who will take ownership of auto-enrolment and undertake an assessment of the workforce and a review of the current pension scheme arrangements
12-15 months Decide on pension basis, choose pension scheme and design internal processes
6-12  months Build project plan and start communication to employees. Implement changes to payroll and data management
3-6 months Commence formal communication and consultation on any changes to existing structure
2-3 months Notify auto-enrolment population
Staging Date Run auto-enrolment process for opt-ins and opt outs. Register scheme

 

What do you need to do next?

Wherever you are in this planning process please get in touch to discuss your requirements and any concerns that you have, plus find out how you can prepare for these changes or contact our Tax Team on 0161 249 5040