As an employer there is a lot to consider for auto-enrolment. You hold the responsibility for choosing a pension provider for your employees. That decision is crucial as 5% of your workers’ eligible wage and 3% contribution from you will be paid into it.
We’ve put together a summary of the things to think about and how we would suggest you approach it.
- Work out which employees qualify, document their age, salary and retirement date. This is important to do as you will need to communicate with people differently and at different times.
- Keep a record of this information and add to it the current status so have they opted out, are they eligible, when did you last contact them, if they are not currently eligible will they become eligible. This information should also be added to their employee records. Keeping records up-to-date and accurate is essential.
- You will need to work with your payroll provider or department to ensure that the correct contributions are made for each employee every time the payroll is run.
- Think about the type of pension plan you want to offer. This is a big decision and it is wise to get advice before you do so.
- You need to understand what scheme you are offering employees, how it will work, when it will start, what contributions it will make and how this will be funded.
- You need to think how the scheme will be managed – is software provided to do this? How will employees get information about their contributions?
What are my options in terms of setting up a scheme?
You can either:
- Do it yourself – Research by the Pensions Regulator* suggests that small employers with between one and four staff will need around 10 hours to fulfil their duties but more recent research by the University of Leeds suggests that it is in excess of that. Looking at the tasks above, everything must be covered.
- Pay an individual Financial Adviser or Accountant to do it for you which will on average cost £1500-£3000 depending on your circumstances. There would also be ongoing costs for administration.
- Work with a Financial Adviser who employs a third party specialist to manage auto-enrolment requirements. You get specialist advice but often at a lower cost and all the compliance issues will be dealt with for you including submitting your declaration.
It’s your choice. Utopia work with a specialist company, as we feel that is what is best for our clients. We can explain how this works and why we have chosen this route when we come to meet with you. An initial meeting is the best way to look at your requirements and consider your options. Give us a call today on 0333 456 0333 to book a suitable time.