This year Automatic Enrolment could present a serious challenge with anyone involved in helping employers cope with the legislation. An estimated 45000 companies stage this year, a relatively manageable number. However it’s worth knowing that from the beginning of January 2016 an average of 50000 employers per month will reach their staging dates.
The Pensions Regulator (tPR) writes to employers 12 months before their staging date informing them of their need to comply. They have also announced that between February and May this year they will be sending letters to all employers that haven’t staged and have a legal duty to do so. This letter will detail the employers staging date but most importantly it will ask for the employer to nominate a key contact, this individual will need to know about all Auto Enrolment duties, in turn the letter acts as a reminder that Auto Enrolment is just around the corner.
Industry experts commonly believe that the planned release of these letters by tPR will cause a wave of panic among many employers who are still ignorant of the changes a foot. Hence there is no doubt that 2015 will see a very large number of employers suddenly seeking guidance and support in order to meet the Auto Enrolment challenge.
So where will employers get the help they need? In an effort to increase activity and interest within the small to medium size employer community, tPRs recent updates appear to be encouraging small employers to approach their business advisers (Accountants/IFA’s/HR consultants) for help.
The key to successful implementation of Auto Enrolment is to instil confidence in our clients and in turn help them treed the critical path that leads to auto enrolment compliance, by avoiding non-compliance fines and desperate last minute panic phone calls.
Ways to instil confidence with your clients
- Know your clients Staging Dates
- Listen to your clients to find out if they have an auto enrolment plan
- Advise your clients on the different ways to set up an Auto Enrolment Pension
- Remind your clients to make a decision and take action
Know your clients staging date
This is a really simple job that might be a little time consuming but will set you up to succeed.
Use the calculator at tPR website and set up a staging plan http://www.thepensionsregulator.gov.uk/employers/tools/staging-date.aspx
Your staging plan may reveal that many of your clients are staging at the same time, so planning ahead is critical.
Listen to your clients
Now you have a staging plan, contact your clients and understand their needs. Do they know about Auto Enrolment? Do they have a plan? Do they have an understanding of costs? What are they expecting from you?
Advise your clients
Because you have spent time listening to their concerns, worries and understanding you will be able to offer more informed advice.
It is crucial that they understand that they need to have set up an Auto Enrolment scheme prior to the Staging Date.
How long does it take to set up? What are their options? How should they choose? How much could it cost? What do they need to do? What services are you offering to help them and how much will that cost? Do they have an Independent Financial Advisor (IFA)? Can you refer an IFA? Do they have to use an IFA? When to start?
In order that you can answer these questions start by contacting your payroll software or outsourced provider in order to understand the parameters of the service you are looking to offer along with a revised pricing strategy. Auto Enrolment will have an impact on your payroll processing time so you need to reflect this in your fees.
Payroll Software Provider – What functionality does your payroll software offer to help manage the auto enrolment process? Can you pick and choose the functionality you want to use or are they interlinked? Is the software compatible with all pension providers?
Outsourced Payroll Provider –If you outsource your payroll service discuss your options and costs.
Independent Financial Advisors – Speak to at least a couple of IFA’s about what they can offer. The difference in schemes, service and cost is broad, so get a feel for the market.
tPR suggest you are clear about the type of Auto Enrolment services you can offer. For instance, as their adviser you may provide an assessment service and even an employee communication service, but will you offer to keep records, deal with the The Pensions regulator or liaise with the Pension Provider?
Remind your clients
Now that your clients know what to do, keep in contact and remind them at every opportunity.
Have they made a decision on which Auto Enrolment Pension scheme? Have they spoken to an IFA yet? Have set up the scheme? Are they 100% ready for Auto Enrolment?
In short, tPR is sending out a very simple message. Make sure you don’t run out of time, be prepared, and know what you need to do and when, comply with the duties and avoid the risk of financial penalties.
With over 1.2 million employers due to stage over the next 3 years its little wonder TPR is trying to keep everyone’s attention
If you would like to discuss any Auto Enrolment queries please don’t hesitate to contact us on 01179353500 or email firstname.lastname@example.org.