Article posted by Robert MacGregor of Beaufort Consulting.
The relentless march of Auto-Enrolment is underway with the largest employers in the UK already emerging from the process. Month by month, increasing numbers of employers will need to establish an appropriate pension arrangement, put the right systems in place, and engage their staff in the process and enrol them in to a suitable pension scheme.
The overall objective of Auto-Enrolment, to ensure that as many UK workers as possible save for retirement, is laudable and everyone at Beaufort is completely behind this important objective. It is critical to the future financial well-being of everyone in the UK that we all start to manage our financial wellbeing and future security by saving for retirement.
That said, the requirements imposed on companies are onerous and horribly complicated, despite the comments from the Minister for Pensions, Steve Webb:
“We have done all we can to ease any burden on business the reforms will bring and employers of all sizes now know the date they need to start enrolling their staff.”
It is true that companies can easily establish the date that they must have a plan in place. However, there is a difference between seeing a storm approaching and knowing when it will hit you , and actually being ready do deal with it.
The pension aspects of complying with Auto-enrolment are actually relatively simple and many employers can even retain their existing pension scheme, where they have one. The reality is that for employers of all sizes, auto-enrolment is actually a massive management, administration and communication issue, and the practical preparation for auto-enrolment together with the ongoing management and governance will hit employers much harder than they think.
The Head of Rewardsat Asda, with all their Finance and HR resources, has said that she wishes that they had started planning 12 months earlier. With much less manpower, what chance do smaller companies have to be on top of this burden?
However daft it may seem, the first answer is to forget the pension aspect and address the real issues. This means looking at a benefits platform to help your administration, record keeping and audit trails. A part of this process is to then consider how much time and effort auto-enrolment compliance will take from your existing staff. We are yet to meet the employer for whom the cost of the system does not represent a significant saving when compared to the manual alternative.
Once this is complete, setting up a pension and possible other benefits and aligning them with the platform is, as Aleksandr Meerkat says: “Simples!”
We have developed a range of solutions to help companies of all sizes manage their way through auto-enrolment. To start the process we can discuss the issues with you and have a range of tools to help directors to calculate the full costs of introducing auto-enrolment and identify how to reduce those costs.
Let us know if you would like to talk to us about identifying and solving your Auto-enrolment issues and running these cost calculations for you.