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Regardless of whether you already have a company pension scheme, it's impossible not to get caught up in the congestion and complexity of auto-enrolment. Employers are responsible for complying with the various rules, and The Pensions Regulator has already fined firms which haven't done so.
An employer's duties include assessing the workforce, putting a Qualifying Workplace Pension Scheme in place, making employer pension contributions, connecting up payroll and the pension provider, as well as communicating what is happening to employees. Given the complexities of auto-enrolment, and the time associated with administration, most firms will look for professional help to set up their pension scheme.
Developments in the market
There is perpetual motion in the workplace pension market as providers refine their propositions and gear up for future challenges. Some traditional pension providers are charging monthly fees to an employer wishing to use their pension plan, some Master Trust providers, such as The People's Pension and NOW:Pensions, are charging a one-off set up fee. The National Employment Savings Trust (NEST) remains free to employers to establish and run.
The payroll software market has finally caught up with legislation and now most frontline payroll software can deliver a good user experience and a compliant outcome. Further innovation from this sector is expected, as efficiencies are gained through technology integration. That said, there are 78 HMRC accredited payroll software providers and there are still big differences between the best and worst systems.
The Pensions Regulator has done a great job with a well-built website that guides employers through the key steps. However, many employers seek help as they simply don't have the time or the inclination to manage the project themselves. Outsourcing costs money, so employers need to be prepared to pay for professional services if they want assistance.
Auto Enrolment is a complex piece of legislation and it's easy to miss critical pieces of information so allow at least 3 months ahead of your Staging Date to plan your project. Take the time to understand the way the legislation works and the burden it places on you, even if you are not operationally involved.
Employers should ensure their payroll provider is able to handle the assessment and statutory communication required under the legislation.
A workplace pension can be a valuable employee benefit, not just a compliance exercise. Employers can set their company apart by choosing a better quality pension scheme or enhancing the contributions they are paying above the minimum levels.
Finally, focus on your employees. When employees understand their potential pension outcomes, and what they need to do to achieve them, then they place a much higher value on the contributions paid by their employer. Above all else, Auto Enrolment is about improving everyone's retirement outcomes, so don't forget to communicate with your staff. You could have a presentation and use marketing material to promote the pension to employees to really help them value the pension scheme.
Please get in touch with Jordans Trust Company Ltd for more help with auto-enrolment. Together we can offer advice and guidance on auto-enrolment and workplace pensions.
Jordans Trust Company offer a full range of modular and flexible accounting services, including statutory accounts, tax compliance, audit and VAT services, as well as essential financial administration services, such as payroll and book-keeping.