80,000 businesses will be setting up for auto enrolment in the next three months
By the end of 2015 there will have been 46,300 businesses staged. In the next three months alone, there will be more than 80,000 businesses setting up their auto enrolment pension schemes.
A recent article from The Times highlighted the fact that "the pensions revolution reaches small businesses" - and if you think that 80,000 over the next three months is a lot of businesses setting up auto enrolment pension schemes; how does 1.8 million over the next couple of years sound?
With just over 45,000 businesses staging in 2015 there are already concerns over the amounting capacity crunch that is starting to impact the payroll and pensions market. The "capacity crunch" is the expected squeeze on resources due to the increased demand for auto enrolment services. Pension providers and business advisers are among those that are expected to feel the pressure amounting on their services which could even see certain businesses be unable to receive the services that they require.
But don't let this panic you. If you are one of the 80,000 businesses setting up your auto enrolment pension scheme over the next three months, then help is available for choosing your auto enrolment solution. If you are one of the 1.8 million businesses that is due to stage over the next couple of years, then there is plenty of help that you can receive to make sure that you don't get caught up in this "capacity crunch".
The key to this entire process is to prepare early. The Pensions Regulator (TPR) suggest that you start preparing 12 months in advance of your staging date. If you don't know your staging date, you can go to TPR's website and input your PAYE reference number to find out.
Getting everything setup in place early means that you can ensure that you have the resources and tools that you need to stay compliant with the legislation. The Centre for Economic and Business Research (CEBR) estimates that setting up a scheme could cost small and micro businesses between £8,900 and £12,600. This isn't the amount that will have to be paid out but the estimated cost to the business in the time taken to set up auto enrolment including choosing a pension provider and selecting your payroll provider.
Here is a 7 point checklist that you can follow to help you prepare:
- Find out what your staging date is by using The Pensions Regulator’s staging date tool, which can be found here.
- Assess how many of your staff are eligible for auto-enrolment - The IRIS AE Suite™ does this automatically with every payroll run.
- Establish the likely costs of setting up and running a pension scheme. Within the IRIS AE Suite™ the AE Configuration Tool estimates how much auto enrolment will cost you.
- Seek advice proactively - address potential problems before they arise, not if they arise. IRIS have product and legislation training seminars that you can attend, or view online. We also have a multitude of free webinars for you to watch On-Demand.
- Choose a pension provider
- Find the right payroll software. Auto enrolment is the perfect opportunity to streamline your payroll process as a whole, as well as remain compliant with the workplace pension legislation.
- Explain clearly to staff what is happening. The IRIS AE Suite™ automatically sends communications to the right employees, at the right time when you run your payroll. This is done electronically to employees' secure, online portals.
Every time you run your payroll, no matter the regularity, the IRIS AE Suite™ will put employees that meet the right criteria into the pension scheme. It will also then tell those employees about the change by sending them a letter to their secure online portal. Payslips and P60s are also published this way to help you cut down on the time and costs that it usually takes you to run your payroll.
Take a look at how the IRIS AE Suite™ works with a free, one-to-one demo. No downloads, no installations, no cost. Can you afford not to attend a free demonstration?