Due to the legal changes for workplace pensions, all companies, no matter how small, now need to provide automatic pension schemes and contributions for their staff. So even if you only employ one person, you still need to make sure you comply with Pension Auto Enrolment.
Every employer now has new duties, and subject to criteria, every member of staff will be enrolled into a workplace pension scheme with the employer contributing towards it.
And it may be ‘automatic’ enrolment for your staff, but it isn’t automatic for you. It is huge increase in admin that you and your HR staff need to plan for. The ‘auto enrolment’ aspect is much more of a task than the ‘pension’!
As an employer, automatic enrolment will also result in extra cost. For the first time, you are obliged to pay into an employee’s pension unless they opt out. Even if you already provide a pension, the number of members will probably increase.
So how will your administration workload increase? You will have to:
- communicate to your staff about the changes
- introduce procedures to cope with auto-enrolment
- choose a pension provider, if you haven’t got one already
- implement the necessary software
- deal with the pension providers
- amend your existing pension scheme, if you need to
- ensure you comply with The Pensions Regulator
- rewrite your induction package to include the new scheme for any new starters.
You must make sure you have one or more qualifying pension schemes, which includes a formal agreement that you, as the employer, will pay the minimum contribution. As employees are automatically enrolled, they are not required to make any decisions, so there must be a suitable default investment option available.
Your next steps
Visit the Government’s Pensions Regulator website, which includes the 7 key steps you need to follow.
If you require advice about how to manage this complicated and compulsory regulation, the extra burden on your HR staff, or any other aspect of HR, talk to me today.