Auto-enrolment dictates that most UK employers put in place a qualifying workplace pension scheme and automatically enrol all qualifying workers. Employers then have to make contributions to their workers’ pensions every pay period. And boosting employee engagement during auto-enrolment will go a long way.
Since being introduced in 2012 more businesses have reached a ‘staging date’ – the point at which staff need to be enrolled into a workplace pension scheme. This date is determined by the size of the business and with the scheme now in its fifth year, more SMEs will be approaching that stage.
The Pensions Regulator has made it as easy as possible for businesses to understand legal obligations and clearly this is paramount for any eligible business. These include the staging date, eligible (and entitled) workers and minimum contributions, amongst others – and it is important to remember that non-compliance can result in fines.
However, there is more to a successful enrolment than simply meeting obligations. People-centric businesses must understand the available options and weigh the choices that can best meet company objectives. Fostering employee engagement during auto-enrolment is a must. What would your staff value the most? After all, this is a decision which could have a major bearing on the morale, engagement and long-term financial stability of employees.
Time to boost employee engagement during auto-enrolment
Above all else, it is absolutely vital to make sure your staff are clear before your staging date what will happen with auto-enrolment, why and from when. Work with your financial advisor to develop an internal communications campaign that both involves and informs staff. Remember they are in the dark about this just as much as you were before the scheme was communicated to you – probably even more so.
It is also important to make sure your staff fully understand and appreciate all the benefits of your chosen pension scheme, particularly where the pension scheme is with a lesser known provider. The value of independent pension scheme governance and the reassurance this provides cannot be underestimated, particularly in light of high-profile media coverage for pensions scandals in recent years like BHS.
Ultimately, this is about communication. Work with your financial advisors to establish both your legal obligations and the choices available to you – but don’t forget the all-important two-way communication with staff. Get it right and auto-enrolment should prove to be a positive tool for engagement and staff morale.
Kevin Hilton is financial planner at Garbutt + Elliott Wealth Management