Start planning now for pensions auto enrolment
The reforms are considered the biggest change to saving for retirement for over a century. The first small and micro employers will need to be ready this summer.
The law means both employers and their staff will pay in to the workplace pensions, or certified qualifying schemes and have procedures in place to comply with assessment and administration requirements.
It is aimed at encouraging millions of individuals aged 16 to 74 to save more – or save for the first time – for their retirement.
According to latest figures, only one in three private sector workers were in a pension scheme in 2012 and the trend has been downwards for the last 40 years. Automatic enrolment aims to change that trend.
A seminar in Poole, staged by PW Payroll Solutions, heard the importance of employers giving themselves plenty of time to put plans in place for auto enrolment.
All employers have a staging date which is set in law and is when the duties come into force for their business. It is the date from when automatic enrolment activities must become ‘business as usual’, like real-time PAYE.
Large firms employing more than 120,000 people started auto enrolment three years ago and the majority of larger size medium employers had their staging date in 2014.
Now it’s the turn for smaller companies to approach their staging dates with the next two years to act.
Bryan McDaniel, Industry Liaison Manager with The Pensions Regulator, said it was vital that employers began planning well in advance of their staging date.
He told the seminar: “Our advice is to don’t leave it until the last minute but, instead, start planning 12 months before your staging date.
“You’ll need to develop your initial plans, find out who to enrol, choose your software, check records and choose a pension scheme.
“The role of The Pensions Regulator is to educate and enable employers to comply with their duties but we do have enforcement powers. Employers who fail to act risk a fine.
“We’d urge employers to visit our website at www.thepensionsregulator.gov.uk and see what needs to be done,” added Mr McDaniel.
Mandy Gardiner, Head of Payroll Services at PW Payroll Solutions, said the two seminars with Bryan McDaniel had been well attended.
She added: “Pension auto enrolment affects all employers, whatever the size or type of business, private or public sector.
“Employers need to start planning as early as possible as auto enrolment will not only affect their budget with employer costs but they may not get their preferred pension provider.
“We will be holding further seminars on auto enrolment so if anyone is interested in attending they should contact us on 01202 663700 or visit our website at www.pwpayrollsolutions.co.uk.”