Getting Auto-Enrolment Ready
Remember Auto-enrolment is not just for Christmas
Christmas is fast approaching, and the season of family, friends and indulgence will soon be upon us. That said, another event is also nigh - for many small businesses, the staging date for pensions auto-enrolment is fast approaching. The Pensions Regulator predicts that 1.3 million small businesses have staging dates in 2017, and 2018 and that means that their final deadline for offering and contributing to workplace pensions is coming up soon.
Are you on this list?
Instead of burying your head in the sand and leaving your auto-enrolment tasks untouched on your never-ending to-do list, why not take the bull by the horns and sort your auto-enrolment out before Christmas?
By setting up your auto-enrolment scheme now, you’ll have one less thing to worry about next year, allowing you to enjoy the Christmas break without a single thought given to pensions.
Need more motivation than simply being able to enjoy a holiday tipple in peace?
Here are four great reasons to start implementing your workplace pension plans and getting on top of your auto-enrolment scheme.
1. Avoid fines
Quite simply, no business wants to pay fines, and yet a failure to get your auto-enrolment sorted will mean just that. The Pensions Regulator will financially penalise any non-compliance to the auto-enrolment scheme, and these fines can be substantial. If you miss your staging date (the deadline for your company to auto-enrol) then you will be hit with an initial £400 fine.
The fines don’t end there - you will continue to be fined every single day after your staging date, until your auto-enrolment has been correctly set up. The penalties will be calculated depending on the number of employees you have: if you have between 5-49 employees, you will be charged a daily fine of £500. Failure to comply to the terms of auto-enrolment does not just lead to hefty fines; you may also face a court summons and a severe hit to your business’s reputation.
Tip: If you’re overwhelmed by auto-enrolment, contact the skilled team at Options Pensions. They are fully familiar with all of the laws surrounding pensions and auto-enrolment, and they will be able to help you make sense of it, make it simple to get set up, ensure you meet your staging date fully compliant and most importantly support you throughout this process and ongoing.
2. Staff Incentives
For small businesses, it can be difficult to offer staff benefits. It is often not financially viable for a small business to provide costly benefits and incentives, such as health insurance, car allowance or gym memberships. By sorting out your workplace pension before your staging date, you are giving your staff an added bonus, as well as offering an attractive incentive to prospective new employees.
Currently the minimum employer contribution to the workplace pension is 1%; however, this is set to rise to 3% in 2018.
Make sure when you are communicating your new auto-enrolment strategy to your workforce that you fully explain that you are required to pay into their pension, as this will help your employees fully understand the benefits of this scheme. If you need help explaining the scheme to your employees, the team at Options can help you to fully explain the process to engage your staff.
By starting auto-enrolment early you may see improvements in employee engagement and productivity, as well as an increase in staff retention.
Tip: If you are unsure of the contributions you will have to make, The Pensions Regulator have set up a handy online tool, to help you make sense of your duties as an employer.
3. Budgeting
For many businesses, January or April means the start of a new financial year. It is unlikely that small businesses will have set aside a handy pension fund to help ease the pain of auto-enrolment, and so it is a good idea to get ahead of the game now. By sorting a workplace pension sooner rather than later, you will be able to more accurately budget your pension expenditure. This is much better to do at the beginning of the financial year, and will help you to meet any budgeting company goals and objectives. It is also worth bearing in mind at this stage that pension contributions will lower your National Insurance bill.
Tip: Employing a financial advisor can help with the overwhelming and daunting task of budgeting.
4. Give Yourself More Time
Full planning and setting up for auto-enrolment can take between six months to twelve months. By starting the process early, you can allow time for any pitfalls or issues that may come up along the process, all without missing your staging date.
There are many legal obligations involved with auto-enrolment, as well as vast amounts of administration necessary when it comes to setting up your auto-enrolment scheme. By giving yourself a head start, you can make a smooth transition as soon as you are ready to fully implement the strategy. It is very easy to underestimate the complexity of the process, and by allowing yourself more time to complete the necessary actions, you can be assured that you are implementing a robust scheme with a smooth transition for your workforce.
Tip: Online software programs are available to help manage your auto-enrolment scheme, and these can often also help you manage your payroll processes. Online software means that material is generated automatically, and so when a new employee joins the company you don’t have to worry about the ongoing administration of auto-enrolment.
It’s a great relief to sort out your auto-enrolment tasks now, rather than waiting until the new year. Getting started now means that you can sit back, relax and enjoy the holidays without any undue stress on your shoulders. Have a fantastic Christmas and a safe and happy New Year!
You can do it even more cost effectively with our Christmas special offer - and in under ten minutes! By going to register via this link www.directautoenrolment.co.uk/referrer/SANTA