The first 18 months of the introduction of workplace pensions reform has underlined the need for all employers to plan ahead.
Don’t leave it too late – is the message from The Pensions Regulator.
Over the next 18 months, it’s the turn of medium employers with around 50-250 workers to comply with their duties to automatically enrol certain of their workers into a workplace pension and make a contribution to it.
The first step is to find out or check your staging date – when do your duties go live – and start planning. An employer’s staging date is determined by the number of persons in the employer’s largest PAYE scheme, based on data from HMRC held by the regulator on 1 April 2012.
New tools available to help employers
Medium sized employers staging by the summer of 2014 should all have had a letter from the regulator 18 months before their staging date and another letter 12 months before it.
Employers can sign up to email news updates, watch webinars and attend speaker events. The regulator also provides telephone, email and postal communication channels.
There are interactive on-line automatic enrolment tools as well as downloadable guidance and documentation on The Pensions Regulator website at www.tpr.gov.uk/employers-getting-ready. This includes a tool which allows employers to develop their own timeline planner.
Plan at least six months ahead
A key lesson learned from employers who have already staged is that leaving it too late can lead to problems which could have been avoidable. One example of this is that employers should not assume their current or preferred provider will be able to meet their automatic enrolment needs.
It is important to check with existing pensions providers that a scheme is suitable for automatic enrolment. Finding out too late that it is not, or approaching a provider who is unable to take on your business to the timescale you have, can lead to complications and risks non compliance.
Having a good payroll system that can assist with the data collation and information transfer between the employer and pension scheme can help to make the process smoother.
Make sure your records are up to date
Another potential problem employers can avoid, centres around the accuracy of employee records. It’s worth ensuring employee records are up to date such as full addresses and dates of birth.
Once an employer has staged and automatically enrolled eligible jobholders they still need to register with The Pensions Regulator in order to be compliant. Some employers have cut it fine in respect of registering. Registration can be partially completed online at any time before the deadline, which for employers staging after January 2014 is five months after their staging date.