Avoiding The Pitfalls Of Auto-Enrolment
Auto-enrolment legislation is certainly burdensome and many companies encounter similar kinds of issues when coming up to their staging deadline. Problems can potentially be costly and are frequently overlooked by employers, but a few straightforward steps can iron out the difficulties. Here are some top tips from Chris Harland on how to avoid the pitfalls:
Choose the right pension scheme
NEST is the government-backed pension company, which offers a free scheme. The set-up procedures are simple and it’s the ideal option when you have very few employees making contributions.
Set up the scheme in time
Reminders are sent up to a year in advance, so it’s easy to put them to one side. Make sure you are properly prepared and don’t miss your staging date.
Prepare employee communications in time
You need to send letters to every employee, even if they’re not eligible to join the pension. Even if you choose to postpone assessment, you must still write.
Make sure you test internet access to the pension website
You will be expected to update monthly or weekly through the online portals of the pension providers. You should therefore register and test the process.
Expect employees to choose ‘not to join’
If your staff meet the eligible criteria, they have to be auto enrolled. The only option they have is to opt out of the pension scheme.
Assume it doesn’t apply to you or your employees
Even if you have no eligible employees, they must receive statutory notices and be told they can ask to join a scheme. As an employer, you have to provide for them and know which provider you can use.
Believe postponement means you can do nothing for three months
While you can defer assessment of employees for up to three months with a postponement, you still have to hand out statutory notices and have a pension in place. Employees can opt in during the postponement period, so it’s not necessarily fixed.
Forget to make your statutory declaration
This can’t be made until after postponement, so is often four months after the staging date. With all the hassle involved in auto-enrolment, it’s easy to forget!
Remember, it’s hard to get everything right by yourself. It’s always worth getting professional support and advice in the process.