If you are an employer, you are probably already aware that the new auto enrolment pension rules mean that you will have to select a pension scheme that meets the legal requirements for certain workers.
No doubt you will also want to ensure that you select a good quality scheme that protects the retirement savings of your workers.
Deciding which scheme to use for auto enrolment will have a significant impact on the retirement income of your employees and a good quality pension scheme does not have to cost more or involve any more effort from an employer’s perspective. Good quality schemes are easier to manage, less likely to encounter administration issues, and a more secure home for pension savings.
There is advice issued by the Pensions Regulator on how to select a good quality pension scheme at http://www.thepensionsregulator.gov.uk/docs/employer-select-pension-automatic-enrolment.pdf
However, because the charges that a pension provider can make have been kept low by legislation, we have learned that many pension providers are closing their doors to new applicants.
Consequently, delay on your part may limit your choice of funds to those with a public service obligation to accept all those that apply such as the National Employment Savings Trust (NEST). NEST has been set up by the Government to ensure that employers, including those that employ low to medium earners, can access a pension scheme and comply with their automatic enrolment duties.
Once the scheme has been established you will be required to undertake:
• a series of continuous assessments of your workers at each pay date;
• regular reporting to your chose pension provider;
• delivery of statutory communications to your employees.
The application of the legislation is to be taken seriously and the Government have made it clear that failures to comply with any of the new rules will result in substantial penalties, often calculated on a daily basis.
It is likely that you will rely on your payroll provider to assist you to comply with the new legislation and in order to offer this peace of mind to our clients we have invested heavily in both new software and staff training.
Because of the number of applications expected over the next few years, most experts recommend that employers should allow at least 18 months to plan and establish their scheme.
Specific advice on Auto enrolment is available on the Pension Regulators web site or you can speak to an IFA.
We intend to run a free Workshop presentation (date(s) to be confirmed) at our Newbury office to explain the issues surrounding Auto enrolment and if you would be interesting in attending please drop us an email at email@example.com