The 6 auto enrolment traps [Free Guide]
Become the Indiana Jones of the payroll world with our free guide to the 6 auto enrolment traps and how to avoid them!
The workplace pension legislation that was introduced in 2012 has proved to be a difficult cookie to swallow.
While businesses and employees alike agree with the changes, it hasn’t exactly been a simple, slight change of course to pensions. The legislation requires all businesses that pay their employees under PAYE schemes to auto enrol their workers into a qualifying pension scheme (should they meet certain criteria based on age and earnings).
With such a massive change in the regulations, there are inevitably pitfalls and traps that are there unfortunately for people to fall into if they are not cautious.
And we aren’t talking traps that will cost you a few hours to put right, either. Some of the mishaps you could face, could cost your business thousands of pounds and numerous days-worth of time.
So, what are the areas that could prove to trap you and your auto enrolment process?
The actual process of assessing which employees are eligible for auto enrolment is a long winded, difficult process that needs to be done with every run of your payroll. This is because, if someone’s eligibility changes between a pay period due to a fluctuation in pay or hours, this will change whether they need to be auto enrolled or not.
Some payroll professionals have been quoted to have said that the assessment itself is a full time job and just simply can’t be done manually. Can you afford to pay a new member of staff to simply just run auto enrolment assessment?
The cost if you fall into this trap: Three and a half days per payroll period as well as a one off burden of up to 15 days
As in one of our previous blog posts “Beware the middleware, don’t get stung”; we have encountered companies who initially decided to stick with their pension provider when it came to auto enrolment assessment.
To begin with this was a free service provided by the pension provider however, when the end of their first year was approaching, they received communications explaining that to continue into years two and three of using the provider for their auto enrolment assessment and communications, they would be charged an unexpected sum of money.
The cost if you fall into this trap: Approximately £7,000 per year
The free guide on the 6 auto enrolment traps from IRIS is available for you to download. In the guide are the remaining 4 traps that you should really look out for as well as a handy checklist of actions you can take to avoid these areas. Finally, there is further information on how IRIS can help you stay compliant and stay trap-free!