How following 8 simple steps can make Auto Enrolment easier for businesses.
For all business owners it can be hard running a business at times – balancing the books, paying employees a fair wage and still making a profit.
Employers are now facing the extra worry of Auto Enrolment and taking care of employees’ pension pots together with the added burden of compliance and administration associated with the new pension legislation.
Time is pressing on and we’re still spreading the word and stressing the importance that robust planning for Auto Enrolment is vital for all businesses.
A number of the clients I’ve approached about Auto Enrolment had heard about it but were finding the new rules confusing, fearing the costs and starting to panic. Walking them through a few simple steps, discussing employer tax relief and then putting an Auto Enrolment strategy in place well in advance has greatly simplified the process.
Whether you’re a business owner or managing payroll and staff taking these 8 simple steps promises to ease the responsibilities of auto enrolment for you.
8 Simple Steps
- Finding out your staging date.
The most important detail in the planning process. Keep your PAYE reference to hand and click on http://www.thepensionsregulator.gov.uk/employers/tools/staging-date.aspx to find out your date.
- Identifying eligible employees.
Assessing the eligibility early on of your UK staff based on age and salary will help with your planning and issuing relevant communications.
- Checking your payroll software is Auto Enrolment ready.
Compatible payroll software will save you administration time by triggering an automated process and generating pro forma letters when an employee’s age, status or salary changes and fits the eligibility criteria.
4. Updating your employee records.
Allowing time for updating and maintaining records ensures auto enrolment will run smoothly for you so check employees:
- Date of Birth
- National Insurance details
- Contact details.
5. Reviewing or selecting a pension scheme early on.
The onus is on you, the employer, to provide a good quality employee pension scheme that is approved by the Pensions Regulator 6 months ahead of your staging date.
Acting now ensures you can pick and choose the pension provider that’s best for your business those leaving it too late are facing disastrous consequences. Without a doubt Pension providers are going to be overwhelmed by last minute applications and unable to process them in time and it’ll be employer that’ll be fined not the Pension provider.
If you haven’t already got Pension Scheme in place seek advice from a good Independent Financial Adviser as soon as possible. You can visit http://www.unbiased.co.uk to find an IFA in your area or we can recommend someone to help you.
6. Timetabling key dates in your calendar.
Planning well in advance guarantees you’re never missing important dates, guarantees you’re fulfilling your compliance obligations and avoids hefty fines.
7. Implementing and maintaining compliant processes
Compliance processes will always be demanding but with the right support it can be made much simpler. Your ongoing duties and responsibilities as the employer are to provide and maintain detailed records (for 6 years) for the Pensions Regulator including:
- The Pension Scheme selected
- Numbers of eligible employees enrolled
- Arrange enrolment for employees that request to opt in
- Employees that opt out (records can be held for 4 years)
- Evidence you’re managing the opt in /opt out process
- All communications in writing
- Evidence of pension contributions meeting minimum tiered rates
- Periodically re-enrol employees that opt out (every 3 years)
- Contributions are paid by the 22nd (electronic payments) or 19th (cheque/cash) of the following month
- Provide details of the nominated contact responsible for Auto Enrolment – this can be your Accountant.
8. Communicating with your staff is an ongoing obligation
If you’re administration systems are Auto Enrolment compatible you’ll easily be able to keep staff fully informed in writing of:
- their rights to opt in and opt out
- type of pension scheme they’re enrolled in
- date added to the scheme
- contribution amount
- opt out procedures.
Auto Enrolment needn’t be a headache with forward planning and the right support.
We can help you with:
- Acting as representative to carry out Auto Enrolment activity nominated on your behalf
- Managing Tax Relief
- Assessing Work Force
- Payroll Software
- Identifying Cost efficiency
- Managing Compliance Processes
- Reporting to Pensions Regulator and Pensions Provider
- Communications with your staff.
If you’ve already received your Staging Date letter from the Pensions Regulator don’t leave it any longer call us now on 0141 290 0262
I would be keen to hear your comments on Auto Enrolment and how it’s affecting your business.
Until next time