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Auto-Enrolment: Plan in Advance

The benefits of forward planning:

1. Budgeting and Cost Control: It is likely that Auto-Enrolment will bring extra costs to your business. If you plan in advance and are aware of your costs then it is much easier to budget for the changes. To meet these costs you could adjust your prices, constrain salary/wage rises or find another source. If these are your plans, consider when you will put these into action.

2. Communicating with your employees: The key to a successful pension scheme adoption or change is to carefully plan communication with your employees and to prepare for subsequent questions and concerns. You should start to plan your internal communication strategy now.

3. Managing any risks: With a major change in company procedures comes a risk of errors and fines. By planning now you can reduce your risk.

4. Peace of mind: By planning your pension scheme implementation in advance, you can be safe in the knowledge that the changes are more likely to run smoothly with less complications.

Your legal obligations:

From 1 October 2012 and the staging dates thereafter, if you are an employer with at least one employee then you are legally obliged to:

  • Set up and register a pension scheme suitable for automatic enrolment
  • Automatically enrol certain workers (known as eligible jobholders) into that pension scheme
  • Arrange membership of a pension scheme for certain other workers
  • Make contributions for eligible jobholders and certain other workers
  • Manage the automatic enrolment, joining and opt out processes
  • Provide specific information to workers, pension scheme providers and The Pensions Regulator (TPR)
  • Keep records of how you have fulfilled and continue to fulfil your duties

Complex issues to be addressed:

There are several factors that may lead to greater complexity in the Auto-Enrolment process. Consider if the following factors relate to your business:

  • High staff turnover
  • Little or no existing pension plan
  • Fluctuating revenue
  • Staff on zero hours contracts
  • Low paid staff with fluctuating earnings
  • Internationally mobile staff
  • Workers whose employment status is not clear
  • Where other benefits are based on being a member of a pension scheme

Should any of these issues relate to your business then you are urged to start planning for Auto-Enrolment without delay.

Should you have any queries or would like further advice about meeting your Auto-Enrolment obligations, do not hesitate to contact our Auto-Enrolment specialists to the right of this page.