Auto-enrolment is here – make sure you’re prepared!
Under new rules being phased in from October 2012, employers are required to automatically enrol all eligible members of staff into a workplace pension scheme and pay a minimum contribution into the fund. The move has been described as the most radical change to workplace entitlements since the introduction of the National Minimum Wage. So is this just another expensive burden to the average SME here in the UK or will we all have some long-term benefit from its implementation?
Set Up Cost’s Akin to Highway Robbery!
As business consultants we are often asked for loans to cover the obscure or the impossible. Just these last few months we have experienced clients saying they need an unsecured business loan to cover the setup costs of their business “Workplace Pension Scheme” as quoted to them by various business advisers.
“How much do you need?” The answer to this question took us by surprise. The average total setup and implementation costs were no less than £10,000 with some reaching £20,000! We thought this can’t be right plus no offers were made for a payment plan due to those involved in delivering the various services.
To better understand why such charges were being quoted we asked what’s needed and when? Of course we learnt that the answers varied according to the size of the business and their staging date given to them by the UK pension regulator. With all this in mind it conjured up an image of days gone by with “Dick Turpin” asking SMEs to “Stand and deliver!”.
Auto Enrolment & What’s Needed
- A known staging date to work back from & plan what’s best for the business/workforce
- Types of worker and what defines them as well as corresponding duties for each type of worker
- Is the business software and processes up to the job of the required auto enrolment?
- Does your current or new pension scheme fit well with the new legislation?
- How do I communicate any changes or information to my workers?
- Complete the declaration of compliance (registration) with The Pensions Regulator
What & How can clients save money & time implementing their schemes?
Of course our first response was to quote unsecured loans which we know can accommodate loans from £2,000 to £100,000+ but they do charge high rates and need to be repaid over an average of 12 months. We looked into the market and our market research has found a company created to provide employers with a complete automatic enrolment solution. Their comprehensive range of support allows them to help employer’s design, implement and run their automatic enrolment schemes. The cost’s are half or less than those quoted to us by our clients and we can arrange for payments spread over 36 months. That’s got to be good news!
We also learnt that “The Pensions Regulator” will enforce non-compliance by issuing statutory notices and fixed or escalating penalties (up to £2500 per day for a medium employer). Oh dear!
If you want to comply with the regulations, reduce time to implement your scheme & SAVE MONEY get in touch with; Tony Law on; 01202 979160