Working this out is just the first step along the long road to making sure you are auto enrolment ready, so now is the time to check exactly what you need to achieve and when, to make sure you’re ready in time.
The Pensions Regulator (TPR) advises businesses to plan 12-18 months in advance for auto enrolment but in reality this is not practical for many business owners, who have many other priorities to keep their business running smoothly.
On top of this, our research shows that just 15 per cent of businesses due to ‘stage’ this year feel qualified to do so and we are speaking to many businesses which have already missed their staging dates.
Fines for non-compliance can reach up to £2,500 a day and The Pensions Regulator has already been investigating companies for handling the process incorrectly. It recently ordered one non-conforming company to pay backdated employer and employee pension contributions of over £140,000, essentially doubling their auto enrolment costs.
It’s therefore essential to make sure your business has enough time to meet its deadline. Here are some tips on how to make sure you meet your responsibilities in time:
Determine your staging date: The date by which you need to comply with auto enrolment will depend on the size of your PAYE scheme. The biggest businesses already ‘staged’ back in 2012 and this process will continue until 2018.
More than half of businesses ‘staging’ over the next year are in the dark when it comes to determining their staging date, so make sure you know when you must comply with auto enrolment legislation, so that you can start planning your preparations. Just remember that you choose to postpone, but this does not change your staging date!
Plan the preparation – Once you know your staging date, work backwards to figure out how long you need to get everything in place. A quarter of business owners say that not having enough time is one of the main obstacles standing in their way of getting auto enrolment ready, so give your business plenty of time. There are 33 necessary administrative tasks involved in preparing for auto enrolment and over 500 pages of guidance from The Pensions Regulator to read through.
Leave enough time for the complexities – Research shows that the biggest concern for employers is choosing a pension plan to help workers save for their retirement. This is a task normally left for qualified financial advisers and therefore a task that requires serious consideration – and time – from employers.
Auto enrolment is a complex process and with TPR recently saying “employers need to do the right thing or we’ll come after them” this is simply not an issue that can be ignored. If you are not yet confident of your responsibilities and meeting your staging date then now is the time to start investigating. Don’t be late – it’s a very important date.
David White is the MD of Creative Auto Enrolment
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