New Auto-enrolment duties introduced by the Pensions Act 2008 have been successfully actioned by around 64,000 employers however this represents only 4% of UK employers. There are a further 1.8million employers that will have to set up a scheme between now and 2018. Over the past three years an average of 58 employers enrolling each day will go up to an average of 2,000 a day between now and 2018. The number of employers going through auto-enrolment each day will go up by 3,500 per cent during the next stage of the process.
This is when the SME business world will really get to grips with auto-enrolment. The next stage of auto-enrolment will be challenging because smaller businesses are less likely to have experience of offering a pension scheme.
Research by Nest has found that only 26 per cent of small and micro employers offer a pension scheme, while 54 per cent of businesses with five to 49 employees say they only have an “informal approach” towards communicating with their workers about HR, benefits and pensions.
Nest’s research suggests that 74 per cent of small and micro businesses will seek external support to help them comply with their auto-enrolment duties.
As a small business it is essential that you know your “Staging Date”. You should already have received correspondence from the Pensions Regulator advising you of this Date. This correspondence will also have asked you to nominate an Auto-enrolment contact. If you don’t know your “Staging Date” or haven’t nominated a contact then you should do so immediately.
The next step is to put a project plan in place to ensure that you are in a position to comply with your new employer auto-enrolment duties from your Staging Date. This plan will include the selection of a “Pension Provider”, ensuring that your payroll provider is able to correctly calculate contributions and provide the relevant information to your pension provider. You will also need to consider how you intend to communicate with your employees and that you are properly keeping the required records.