In this scenario the flood is in the context of pension Auto Enrolment, and thankfully we’re highly skilled boat builders (solution providers). As the proverbial highly skilled boat builders we aim to highlight the issues for employers around AE, and more helpfully options around robust solutions and how you, as the employer, can change Auto Enrolment from simply being a cost to your business into:
- A means of attracting the best staff
- Keeping the good ones you have and as a result
- Improving your productivity.
(See I told you we were good a building boats!). Before we get ahead of ourselves though, let’s recap the potential issues employers face.
As we approach the middle of 2015 we are half way there from a time perspective (mid way between 2012 and 2018). We are half way there regarding the number of employees to be auto enrolled into pension schemes. But (and it’s a big but) we are only a fraction of the way to setting up pension schemes for all the employers in the UK.
Up to April 2015 we have, as an industry, established around 32,000 schemes, many of which were in existence well before auto enrolment was muted. So that leaves a further 1.2 million or so for employers with smaller or non-existent HR departments and less pension experience to establish.
It’s not surprising then that The Pension Regulator issued 1,139 notices of non-compliance in Q4 2014 up from 163 in the previous quarter. By the end of March 2015 1,529 had been issued. Whether this means the regulator is getting tough, there are more firms staging, or that employers are simply not being courted by pension professionals the way they were when scheme sizes were larger is almost irrelevant. What is very relevant is that:
- Fines are charged on a daily basis
- If you miss your staging date you will still have to make good the missed payments for your employees
- Many providers now want an employer fee for schemes with lower average premiums, if they will take them at all.
What’s the solution for all employers left to establish their Auto Enrolment schemes?
Quite simple really, engage your pension professional at least 6 months in advance. This allows time for them to source the right solution for your business with commitment from the provider they will take it when the staging date comes. It also allows time for your pension professional to provide the associated benefits which turn auto enrolment from a cost to an opportunity to offer something your employees really value.
We offer various solutions catering for all sizes of business and budgets so before you decide to embark on this significant task yourself why not have a chat with us, we’d be happy to see if we can help.
Justin Corliss, Employee Benefits Consultant
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