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Auto Enrolment do you need help?
New research*, from workplace pensions provider NOW: Pensions reveals that four in ten (44%) small and medium sized companies haven’t given any thought to how they’ll go about finding a pension scheme to comply with the new auto enrolment legislation. But, a significant proportion, (14%) intend to get help from their accountant.
Of the 450 small and medium sized firms surveyed 5% are going to consult an IFA, 4% are going to search the market and do the research themselves. Only 2% have already made a decision and secured a scheme.
Over a fifth (22%) intend to use their existing pension provider for auto enrolment. This comes despite growing concern that some providers will not support smaller employers’ auto enrolment needs.
Despite a large proportion of SMEs admitting they are yet to think about their pension scheme, over half (57%) of firms surveyed think that their choice of pension provider is either important (33%) or very important (24%). Only 8% think it is unimportant.
Four in ten (40%) believe offering a good quality pension scheme will help with employee retention and nearly a third (32%) think it will help to improve the attractiveness of their company to potential employees.
Morten Nilsson, CEO of NOW: Pensions continues: “As auto enrolment gathers pace, accountants will play a key role in guiding small and medium sized companies through the complexities of the legislation. For those accountants that manage payroll, auto enrolment is unavoidable so getting to grips with it sooner rather than later is a must.”
Stephen Milne Chair of the CIMA Members in Practice Panel said: “With over 10,000 employers auto enrolling each month, support for SMEs is inevitably in short supply. Accountants are ideally placed to provide much needed help with the process from scheme selection to assessment and implementation.”
Through Business Accountant, a service provided by CIMA Members in Practice, companies facing auto enrolment can book a local CIMA Member in Practice by calling: 023 8064 3763.
*Research undertaken by BDRC Continental, an award-winning insight agency. Questions were put to 450 UK SMEs (up to and including 250 employees) via BDRC Continental’s monthly Business Opinion Omnibus. Telephone-based interviews with a nationally representative sample of senior financial decision makers across the UK, weighted by size, region and sector. Fieldwork dates 3rd to 13th March 2014
**Research conducted online with 264 advisers by Defaqto between 25th November and 5th December 2013.
3 ways to comply with Employer Auto Enrolment Obligations
Auto Enrolment has arrived and there is a lot to do……
http://www.youtube.com/watch?v=XDnkEd8zCzM
The Pension Regulator website will help you create a stage by stage plan working back from the date when you need to start (staging date), it is a useful planning tool http://www.thepensionsregulator.gov.uk/employers/planning-for-automatic-enrolment.aspx
Most schemes will be set up with one of the following providers:
NEST – National Employment Savings Trust – NEST was originally created by the government – limited help for employers
The Peoples Pension – B&CE – B&CE is well known in the Construction world, they have online tools to help you
Now: Pensions – ATP (Denmark) – 45 year experience in pensions and many awards
You could use another provider and you should take independent expert advise, never give pension or investment advice unless you are qualified to do so.
If you are asked for advice remember to say ‘I know nothing’
http://www.youtube.com/watch?v=s6EaoPMANQM
But as an employer you do need to select a pension scheme for Auto Enrolment.
Then you need to consider how you will comply with your responsibilities and keep records for:
- Contributions
- Opting Out
- Opting In
- Earnings
- Employee Records
- Communication with Employees
Take a look at this video for middleware to get an understanding of how you could manage your compliance requirements
So here are your 3 basic ways to comply:
- Small Employers – you may decide to do it yourself using information on the Pension Regulators website and provider of your choice
- Pension Provider Portals – schemes like the Peoples Pension will have portals and tools to help you manage your auto enrolment pensions but it won’t cater for other benefits and other schemes
- Middleware – like the video above, this gives lots of functionality and will allow you incorporate other schemes and benefits but its not free
You might also find this blog worth reading ‘10 things you need to know about Pension Auto Enrolment’
steve@bicknells.net
10 important things to know about auto enrolment pensions
Here are 10 things that you need to know:
- A Worker may include Agency workers and Self Employed workers depending on the their contracts
- One Person companies are not subject to Auto Enrolment however, if the company takes on a second worker and the director and new employee have contracts of employment then both could become workers under auto enrolment.
- Eligible Job holders are aged between 22 and state pension age and earn over £9,440 and are automatically enrolled however Non Eligible Job holders could opt to join
- Employer contributions will be 1% from October 2012 till 2017 (2% total contributions), then 2% till 2018 (5% total contributions), then go to 3% (8% total contributions)
- The employer must register their scheme www.tpr.gov.uk/registration
- The scheme is being introduced over a 5 year period starting in 2012, to find out when it applies to your business click on this link http://www.thepensionsregulator.gov.uk/employers/staging-date-timeline.aspx
- Employees can opt out but new Employment Rights will prevent employers from offering inducements to opt out and prohibit employers from anti pension recruitment policies and unfair dismissal relating to pension enrolment
- If the employee opts out the employer must automatically re-enrol them every 3 years
- The Pensions Regulator will have powers to issue compliance notices and fixed and escalating penalties increasing on a daily basis. Employees who blow the whistle on their employer will be protected under the Public Interest Disclosure Act 1998
- The following types of scheme will qualify
- Defined Benefit Schemes
- Defined Contribution Schemes
- Hybrid Schemes
- Contract Based DC Schemes
- Stakeholder Pension Schemes
steve@bicknells.net
Business Accountant 