Many businesses and their employees are aware of the legislation surrounding auto-enrolment for pensions.
Indeed, the ‘staging’ dates for bigger companies have already come and gone, so quite a few lessons have been picked up along the way.
Perhaps your own date still lies ahead, but you’ve talked to your IFA and identified a provider? It would be easy to think you’d done the hard work. But actually, the real issues may still lie ahead.
Data compliance, processing and communication are all potential headaches for businesses. After assessing your existing pension and selecting a new scheme, you need to identify your eligible employees, conduct an impact assessment and then communicate about the staging date. And when the staging comes, you’re into the business of doing the payroll deductions, physically paying the pension provider and again communicating with your staff.
Some accountancy firms provide a ‘bureau’ solution for payroll – overseeing the process on behalf of numerous businesses. If you make use of this kind of service, it certainly reduces your stress, but you need to make sure that your professional partner is geared up to the communication aspects of the new pension regime. Telling employees they are enrolled and when the money’s being deducted for instance, or compiling a remittance file and sending it to the pension provider.
Of course, you can choose to manage the process yourself, but penalties for non-compliance can be up to £10,000 a day, so even the most professional of businesses might want to look at an outsourced option. It soon becomes obvious that the pension commitment itself is only part of the cost of the new legislation. It can potentially eat up time and internal resources. And that’s before you consider the cost of purchasing specific pieces of software or signing a formal outsourcing contract.
Some of the third-party software solutions on the market can integrate seamlessly with your payroll platform, but it’s possible to create even more technologically advanced solutions. Imagine, for instance, communicating with your employees via Android, iOS or other mobile platforms. It’s relatively easy today to send P60s, payslips and pension communications, for instance, directly to employees’ phones.
The advice from experts, as you might expect, is to think ahead. If you give yourself a year to plan before your staging date, you will not only ensure that you select the right pension provider, but you’ll also have in place everything you need for practical implementation.
Contact me, or any of our team, if you’d like to talk this over further.
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