Posted on 3 May 2016
Despite the publicity surrounding the issue of Auto-enrolment there are still many companies and organisations failing to comply with the regulations on work place pensions and failing to put their eligible workers into a pension scheme. Companies are still burying their head in the sand and disregarding their responsibilities as demonstrated in a recent case that the Pensions Regulator has taken out against Swindon Town Football Club.
So why are people still falling foul of the deadlines?
Auto-enrolment was introduced by the Department for Work and Pensions to help more people save for their retirement by having a workplace pension scheme.
The rules mean that employers have to automatically enrol eligible workers into a company pension scheme which meets certain criteria. Even if you already have a pension scheme, it might not meet the standards required by the regulator.
The Pensions Regulator will have written to each employer with details of their staging dates. The issue that many employers are seemingly having is underestimating the time it takes to set up a suitable workplace scheme, as it can take up to six months to establish such a scheme. Also establishing which of their employees are eligible is also a cause for concern, as all employees have to be signed up to allow them the opportunity to opt out. So, rather than dealing with the minefield of Pension Products available head-on, some employers are ignoring the issue. This then leaves them open to a risk of non-compliance and possible fines.
The answer is to ensure that a qualified Payroll or Workplace Pensions adviser is consulted. That way an employer can be guided through the many products and regulations to ensure that the right product is chosen for the individual firm and that all eligible employees are registered. Many employers are concerned about the cost of doing this, however, the cost of consulting with someone else will be far less than incurring a fine for non-compliance!
Smith Cooper is able to offer independent advice on Auto-enrolment through the Payroll Services Division. If you need to consult in confidence with an adviser please contact Chloe Hughes, Payroll Manager, Smith Cooper.