When it comes to the implementation of pension schemes, employers need to plan early allowing a minimum of 12 months prior to their staging date – their start date for auto enrolment. There are certain factors that need to be considered and tasks that need to be completed.
If a current scheme is in place it should be reviewed to confirm if it meets the new requirements or a new scheme sourced if no scheme is in place.
Employers need to assess their workforce which means understanding the category of ‘workers’ they employ and their obligation for those categories. They need to understand what is involved should they opt to base their scheme on a ‘qualifying earnings basis’ or whether they ‘self certify’ and the impact this decision has on the required level of contribution.
The different options available to the employer can then be discussed and the impact – financial and resource – needs to be recognised and planned for. To try and reduce the impact and additional financial burden auto enrolment may bring to employers the required level of contributions is being phased in over a period of six years from October 2012.
Once the scheme is up and running, appropriate records need to be maintained and held for inspection if called for. Any company falling short on their record keeping will possibly face severe fines from the regulator.
Support is available for employers to help them understand their obligations and prepare them for this significant change. It must be stressed that the sooner advice is sought the more likely it is that a comprehensive plan can be established to ensure that the company meets its obligations and avoids any unnecessary cost and inconvenience.
As independent financial advisers, we will clarify where employers currently stand with the existing scheme and can work with them to establish a pension scheme fit for auto enrolment.
How Can Nelsons Help?
If you are interested in a initial consultation meeting to discuss this, or any other aspect of financial planning then please contact our Investment Management Team on 0800 024 1976 or via our online form.