Countdown to auto-enrolment
Auto enrolment is well under way with years of planning now starting to come to fruition as businesses sign their employees into an automatic pension scheme.
As their staging dates approach many businesses will have held detailed meetings with their workers, letting them know what auto-enrolment is all about and where they can choose to invest their pension funds. Those that don't hit their fast-approaching deadline could face tough penalties.
So how successful has the scheme been so far? Here, we discuss how auto-enrolment has been received and what should be on a company's checklist as they approach their staging date.
On a roll to auto-enrolment
Auto-enrolment applies to all businesses across the UK which employ at least one person or more, and each now has a legal duty to put their workers into a pension scheme.
Firms have until March 2018 to get their employees enrolled into a scheme but the government has staggered the sign up rate by sending companies their own individual 'staging dates' – when they should have sorted all staff into a pension scheme.
The legislation surrounding auto-enrolment has been around for several years but it is now really starting to kick in. However, despite reminders and a multi-million pound advertising scheme, several businesses have missed their staging dates.
According to reports, one in six businesses is signing up to auto-enrolment schemes after their deadline has passed. A survey by insurance giant Aviva found 16% of firms signed up to one of its auto-enrolment products even though their staging date had already passed.
The figures, taken over the first quarter of 2017, showed a 14% rise in those missing their deadline, compared to the previous quarter.
Aviva's survey, of its own customers, also revealed the proportion of companies who made plans for auto-enrolment more than two months in advance was just 25% - its lowest level since the legislation was introduced.
And despite the huge government advertising campaign, it appears the employees who are meant to benefit the most from the scheme, don't have a firm grasp of auto-enrolment and what it's all about.
New research, published earlier this year, revealed that less than one in ten workers in the UK have a clear understanding of the pension scheme.
The government's own Department for Work and Pensions is due to review the auto-enrolment scheme, and how it has fared, later this year.
What companies need to do now
All businesses should have now made a start on enrolling their employees. The government has advised firms to allow 9 – 12 months to have the scheme fully in place.
As we are now less than a year from the final deadline of March 2018 it is imperative that all businesses, no matter their size, have begun the process.
If you have got over the first hurdle of establishing your duties as an employer, but are having difficulty with the next steps leading to the final declaration of compliance, help is on hand. The Pensions Regulator has guidance, step by step guides and information on its website.
The team at AMR are also available to help businesses navigate the pensions process. We have teamed up with The Pension Counter – who specialise in auto-enrolment – to offer our existing and new clients unrivalled support and guidance to ensure they hit their staging date.
You can read more about our auto-enrolment services here
one of our friendly team to find out more about how we can help you through the process.