Two-thirds: the proportion of employers yet to stage
The Pension Regulator’s (TPR) latest bulletin features statistic of the month: two-thirds is the proportion of employers yet to stage who are micro employers.
With around 1.2million businesses set to stage between now and 2018, there is likely to be an increase in the strain on services within the pensions industry.
While TPR suggest that businesses start preparing for auto enrolment 12 months before their staging date, more and more people will be looking for pension providers, advice and solutions for auto enrolment all at the same time.
As previously mentioned in our blog about the “capacity crunch” pension providers are less likely to accept business for auto enrolment workplace pensions because it doesn’t propose a profitable business venture for them. With the contributions and pot sizes to be very low, the rate of return on the investments is not likely to make much business sense for most pension providers.
Bearing this in mind, NEST have a public service obligation from the government to accept all auto enrolment business. This means that while NEST can’t turn anyone down for auto enrolment pension schemes, everyone else (in theory) can.
With this squeeze on pension providers also comes the squeeze on advice and resources for auto enrolment training, software and help. According to TPR research, two-thirds of businesses surveyed are also likely to consult an adviser for help and information on auto enrolment.
With the large majority of businesses all set to stage between now and 2018, the time available for help and advice is likely to be running short.
Prepare and plan early. While for a lot of businesses auto enrolment will be 12 months or more in the future, this really isn’t a long time when it comes to the amount of work that goes into the process. We recommend that initially, you familiarise yourself with auto enrolment and exactly what is required of you as an employer.
You can attend an IRIS Auto Enrolment Legislation Course to help you fully come to terms with what is required of you and the responsibilities that you must meet.
In addition to this, it is important that you let auto enrolment live up to its name and make the process just that; automatic!
Trying to process auto enrolment manually could be an extremely time consuming process and getting it wrong will cost you in non-compliance fines of £400 fixed penalty notices and even daily fines of up to £10,000.
The IRIS AE Suite™ automatically assesses employee’s eligibility for auto enrolment, distributes payslips and P60s electronically as well as publishing pension communications to the employee’s secure, online portal. Streamlining your process like this could save you a lot of time, considering that this process needs to be completed every time you run your payroll. Find out more with a free demonstration of the software.