Yes, this headline is correct! With at least one industry observer reporting that SMEs are discovering more benefits than they previously imagined from auto enrolment, the time’s right to look at positive aspects of this fast-approaching requirement for SMEs like yours…
Auto enrolment, the biggest change in UK pensions for over a century, was launched on 1 October 2012. The change in law was largely brought about in response to research by the Department of Work & Pensions showing that some seven million UK employees weren’t saving enough to enjoy the retirement standard of living to which they aspired.
You don’t have to dig deep to find research showing that the attitude of SMEs often changes considerably after auto enrolment staging. This is particularly noticeable for areas such as employee engagement, attraction and retention of staff, and even productivity. More on that later, but first we can’t over-emphasise that the top priority of auto enrolment has to be compliance with the law.
Top priority: legal compliance
Specifically, this means the law on workplace pensions that changed with the Pensions Act 2008. The Act introduced a roll out of “staging dates” that will eventually see every employer in the UK required to put ‘eligible’ staff into a pension scheme and contribute to it. Although tens of thousands of businesses have already complied, staging has yet to reach thousands more SMEs. But don’t get complacent, because it’s possibly closer than you think! In fact, if your business still has to be embraced by ‘AE’, it’s just around the corner. And with another day’s business, you’re even closer to your staging date.
Your staging date is approaching fast
The following table shows how, as of October 2015, the staging dates for businesses with 30 or more eligible employees had been reached. The dates for smaller workforces, maybe including yours, run from June 2015 to 1 April 2017. Time is of the essence so if you don’t know your staging date, look it up.
Avoidance isn’t an option
Avoidance isn’t an option. After three years, we know that auto enrolment compliance is being strictly policed and substantial fines are being issued to non-compliers. Indeed, a bulletin issued by the Pensions Regulator in January 2015, stated that by the end of 2014, 169 employers had already been fined for failing to comply with their workplace pensions duties.
Exciting opportunities ahead
Auto enrolment is undoubtedly complex and imposes a considerable responsibility on employers. It also has the potential to be a big distraction from your day-to-day operations. But that can be allayed with help from a specialist auto enrolment consultant. And with setup, consultation and administration taken care of, you have some exciting opportunities. For a start, you may be able to mitigate some or all of the costs associated with changing your existing benefit schemes and pensions. This could be expensive, but if planned wisely (and in conjunction with that professional partner) auto enrolment and advanced planning may enable you to mitigate some of these costs. Better start soon though…
Show current employees that you care
As mentioned earlier, setting up your auto enrolment system is a great opportunity to show current employees that you care. Okay, so auto enrolment is mandatory and some might say that you have to do it anyway, so what’s the big deal? A more enlightened perspective is that enthusiastically embracing the imperative – and maybe even going a little further than strictly required – is a great way to demonstrate commitment to your most valuable business asset. Auto enrolment involves compulsory workforce consultation and communication. So how about making an occasion of these necessary administrative events, and laying on some refreshments for your employees? What a great opportunity to get everyone together and demonstrate how auto enrolment represents a positive change to their benefits package.
Attract the best talent in future
The same applies for new employees. Imagine what a solid foundation a well-implemented auto enrolment scheme could be for a broader benefits package. As a growing business, you want to attract the best employees in future, don’t you? The right choice of auto enrolment scheme now will set you up to attract and retain the talented people that will give you competitive advantage in future.
Auto enrolment help is available
Clouds and silver linings come to mind. Make no mistake; complying with auto enrolment is a major ‘life event’ for any SME. But help’s available, ranging from basic advice to specialists such as BookCheck who can take away the worry of compliance while you get on with running your business. And while you’re doing that, how about making the commitment to turn a legal requirement into a tangible long-term benefit and competitive advantage for your SME? Founded in 1994, BookCheck Ltd, with 54 employees at several UK offices, successfully services the needs of business owners and directors. BookCheck is totally focussed on just two key services: Sage & Xero bookkeeping with management accounts and Payroll-bureau services with auto enrolment. To find out more about taking the hassle and worry out of your auto enrolment and payroll, call 0800 883 0711 or email us.