5 AUTO ENROLMENT OPTIONS
As an employer you should be aware of auto enrolment and what it means for your business. With your auto enrolment staging date approaching fast you are probably looking around at how to comply with the legislation. What are your auto enrolment options? This article gives you 5 options for your auto enrolment pension scheme.
If you are new to auto enrolment, check out: what is auto enrolment.
- What employers want from auto enrolment options
- 5 auto enrolment options
- Get auto enrolment off your desk with our low-cost guide
What employers want from auto enrolment options
You did not want auto enrolment for your business. Running a business in the current economic climate has been hard enough without more expensive and time-consuming legislation to comply with. Auto enrolment is a burden for all businesses, no matter what size. Unfortunately, auto enrolment is here to stay. It will be a bigger burden for you if your business is small.
” Research has shown that it can take up to 103 hours for a business to comply with the legislation, and that’s only up until the launch of your pension scheme.”
Here are 5 things employers tell us they want to help them with their auto enrolment options:
Get it off my desk
You did not ask for auto enrolment, and you just want it off your desk. Research has shown that it can take up to 103 hours for a business to comply with the legislation, and that’s only up until the launch of your pension scheme. You can get auto enrolment off your desk in 2 ways:
- Delegate it
This is the default position for most business owners. They pass the auto enrolment problem to a member of staff. Unfortunately, that member of staff is not ultimately responsible for the pension scheme – you are. It is likely that they have little experience of working with complex pension arrangements. This option can work, but be prepared for some delays and problems along the way.
- Get an expert to help
The simplest way for you to get auto enrolment off your desk is to bring in an expert to help. Obviously, this will cost you money. Just how much will depend on the quality of the service you expect, and the expertise of the expert. Auto enrolment is a mixture of disciplines. It is mainly about payroll and administration, but it is also about pensions. It is probably the pension part that is likely to get you into trouble if something goes wrong! Bear in mind that auto enrolment advice is completely unregulated. Many companies have become involved in this market, with no experience in managing pension schemes and the complex rules that surround them. Choose your advisers wisely!
Save me money
It goes without saying that you don’t want the expense of auto enrolment. This comes in many forms such as:
- Pension contributions
- Time spent on administration
- Software packages
How much money you want to spend on auto enrolment depends on the service you want from your support provider and how much you are prepared to do yourself. You might save money on support costs by bringing the administration in house but this will come at a cost in terms of time spent away from the business by those members of staff tasked to deal with the problem of auto enrolment. There are various software solutions designed to help you with auto enrolment. These can be quite cheap or more expensive. Those cheaper options tend to only do part of your job. You need to do the rest. A low-cost package will save you money, but not as much time as you might want. We offer a low-cost, self-service solution to your auto enrolment project, starting at £97.
Save me time
If time is your biggest issue then self-service is probably not the way to go. You will certainly want to look at support software designed to automate many auto enrolment tasks. You might also want to get some expert advice and support, especially in the pension set-up stage.
Deal with staff queries
One of the biggest problems with auto enrolment can be the queries that are generated by your staff. Many staff are unfamiliar with pensions, and can resent the cost to them, despite the fact that you are also having to pay in to their scheme for them. As an employer you need to be careful that you do not give advice on pension issues, and do not influence staff decisions on areas like their right to opt-in or opt-out of their pension. This area includes:
- Opting in and opting out of the pension
- Choosing investments
- Additional contributions
- Rules around pensions
- Previous pension arrangements
One of your auto enrolment options can be to get a pensions expert in such as a financial adviser to present the scheme to your staff and to answer all their pensions questions. This takes the responsibility away from you as an employer. You can also refer your staff to a pensions helpline set up by your chosen pension scheme. This service could answer most of their queries.
A decent pension scheme
As an employer you want to set up a good pension scheme. This is not only because you want the best for your staff, but also because you do not want to have to go through the hassle of changing pension scheme in a few years’ time. The good news is that all pension schemes offering auto enrolment meet minimum standards. You should be careful to choose the right scheme since this can be a big source of additional work if the pension scheme does not meet your needs as a business.
5 auto enrolment options
Here are your main auto enrolment options:
This is obviously the cheapest option, but the most expensive in terms of time and hassle. You are much more likely to experience problems with self-service and auto enrolment unless you know exactly what you are doing, or your business is quite small. You do not have to pay for support as pension providers give you a degree of assistance. Just be prepared to find your way as you go. If you select this option you should allow your business plenty of time to prepare and to deal with the inevitable problems as they occur.
Most payroll software companies are now launching additional services to help you to deal with your auto enrolment responsibilities. This is a logical place for you to start and is relatively inexpensive, unless you do not currently use payroll software to run your payroll. For example, you might use a basic accounts package, but not the payroll add-on. You will need to add the payroll part of the software as well as the auto enrolment elements. Payroll software can be a good solution but is unlikely to go as far as you would like to get auto enrolment off your desk. You will still need to do quite a lot of work.
Specialist auto enrolment software
A more expensive option can be to use specialist auto enrolment software. These packages are designed to take the hassle out of running an auto enrolment pension scheme, and to keep you compliant with the Regulator. The software will act as a bridge between your payroll and your pension scheme. This means that you will require minimal effort to ensure that you keep your scheme running properly, and compliantly. This software produces all the documents you need automatically, and keep records for you.
Full auto enrolment consultancy
This auto enrolment option is likely to be the most expensive for your business, but is also the least likely to cause you problems later. You can pay for expert support to help you to choose the best pension scheme, to comply with the regulations with the least hassle, and to manage your scheme (or at least train your staff). This is the option for you if you are a larger company or want the least interruption to your business.
Ad hoc support
Naturally, you can mix up the auto enrolment options mentioned above. You might decide to set everything up yourself, but choose to bring in a financial adviser to communicate the changes to your staff. The choices depend on the needs of your business.
Auto enrolment options – what next?
You should think carefully about the needs of your business. Ask yourself these questions:
- How much expertise do you have with pensions?
- How much time do you have to devote to auto enrolment?
- What is your budget?
- How soon is your auto enrolment staging date?
To find out more about the guide, please get in touch with us http://www.woodruff-fp.co.uk/contact-us/
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