Three quarters of employers think the Government’s auto-enrolment reforms are complex or very complex. Yet over the next five years every employer must comply. Don’t underestimate the amount of preparation compliance will entail, says Mike Jenkins, Business Development Manager at Welplan Pensions.
The biggest change to UK workplace pensions in a century began in October with the commencement of auto-enrolment as part of the Government’s Pensions Act 2008. The first staging date for auto-enrolment for employers with 120,000 employees or more was on October 1. Over the next five years every employer must automatically enrol every eligible jobholders into a qualifying workplace pension scheme and make contributions. Eligible jobholders include UK workers aged between 22 years and state pension age who earn more than £8,105 a year.
However, only 28% of smaller firms have budgeted for the cost of auto-enrolment, according to new research from the Association of Consulting Actuaries (ACA). Fewer than 20% of the firms were aware of the details of auto-enrolment. Of those that were aware, 53% said it was complex and 23% said very complex.
Employers must prepare to meet their pension responsibilities now to ensure they comply with the law.
The chief executive of the National Employment Savings Trust (NEST) called on pension providers, advisers, payroll professionals and government bodies to work together to help employers navigate their auto-enrolment journeys and smooth the inevitable bumps in the road.
He said: “Employers need to understand how much time they need to prepare, what they need to do and what support is available.”
The Pensions Regulator chief executive Bill Galvin also talked about the challenge of seeing the industry through auto-enrolment.
He said the worst case scenario would be employers not preparing on time and added: “Our role is to make sure that members do not lose out if their employer does not take a sensible approach to getting these things in place.”
A sensible approach involves identifying requirements, preparing for and implementing automatic enrolment to cover all eligible employees, as and when they become eligible, including part-timers and contractors, while keeping on top of ever changing goalposts. It is no mean feat. Even employers that already auto-enrol staff may need different processes to comply with the legislation.
The right scheme
NEST is designed to assist those companies looking for a qualifying scheme. However, other schemes either run in-house or by another provider, may better suit businesses’ needs. Some businesses may be best served by using a qualifying scheme by another provider that would not only manage the scheme but also keep the company abreast of changes. Some businesses may also be better off signing up to such a scheme sooner rather than later.
Welplan Pensions is a qualifying pension scheme that was established in 1988 to meet the particular requirements of the building services industry. It has been the preferred pension supplier for the H&V National Operative Agreement since 2010 and recently appointed preferred provider for both the Engineering Construction and Thermal Insulation industries. The scheme meets all the requirements of the new pension legislation.
Welplan Pensions offers a pension solution for your entire workforce and takes care of automatic enrolment and re-enrolment with a tried and tested administration system, providing advice and support through a dedicated helpline. In short, it could be the answer to your workplace pension needs.
For more information on Welplan Pensions call 0800 1958080 or visit www.welplan.co.uk/pensions
Old Mansion House
Contact: Mike Jenkins
Tel: 0115 966 5931
Fax: 01768 860401