The roll out for auto-enrolment (AE) started in October 2012 and will see ten million people saving towards their retirement. This means more than 1.3m UK employers must enrol employees onto a scheme and are legally obliged to make a contribution towards the pensions.However, according to the latest AE compliant report, the number of employers in the UK who have breached the new workplace pension rules has significantly increased. In addition, from October to December last year, the Pensions Regulator issued 166 fines of £400 and 1,139 compliance notices. The basics of AE for SMEs and the need to get the UK workforce paying into a pension scheme are no different to the original requirements that were faced by the largest companies due to comply to AE duties in 2012. Those at the smaller end of the market won’t necessarily have a department dedicated to running payroll for a large team or have the resource to investigate and implement the best practice. As a result, it could fall to the person running the finances or even the manager or business owner to fully understand AE and make the business critical decisions required in advance of the allocated date. In order to stay ahead of the AE boom and avoid potential fines and penalties, SMEs should consider the following: Comply or get fined: The very real possibility of being fined for non-compliance is an obvious reason to be compliant. However, as more and more companies comply with new AE requirements in large volumes over the next year or so, they must remember they will be just one of thousands looking for the right pension and guidance simultaneously. If left until the last minute, response times will inevitably slow as potential client numbers grow. Take the time to learn: Time must be taken to learn what AE really means to a business, but this in itself will take time due to issues such as the terminology, rules, communications and declaration of compliance. It’s easy to not give AE the time or attention it deserves when other day-to-day demands of the business need to be dealt with, but failure to focus on it now will cause headaches further down the line. Read more about employment law:
- The big employment law guide: What to expect in 2015
- Is ASDA really facing a “Made in Dagenham for the 21st Century”?
- A guide to employment tribunal claims
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