“There are two choices for sorting out your Auto-Enrolment responsibilities,” writes Sian Castle, co-founder of Sapien Global Services, “and time is running out”.
According to the Pensions & Lifetime Saving Association, fewer than 5% of employers have so far automatically enrolled their employees into a Pension, and if you are one of the estimated 1.8 million or more employers still to go through the process, time is running out. And the choice is really quite simple; you can do it yourself or you can get someone else to do it.
Do It Yourself
If you choose to go through the process yourself, there is a wealth of guidance, educational and support available from a number of sources. A good example is Pension Solution, launched before Christmas by the Pensions and Lifetime Savings, a membership organisation for the Pensions and Savings Industry in the UK. Their new services aims to provide a guide, education, training and support to businesses that want to operate their pension scheme internally.
“From the first moment to completion, our step-by-step guide will answer your questions, talk you through each stage, and help you find the right pension scheme for your business.” These have broken down the process into nine distinct steps – Plan, Research, Forecast, Choose, Assess, Explain, Enroll, Contributions, Post-Staging Obligations. It’s clear and well written, even if it does expose just how much there is to think about.
Access to the services requires a paid subscription to the association but this is a modest £49. If you’re going to invest time into doing it yourself, this is a good place to start your research.
Get Someone Else to Do It
The other approach is to simply outsource it to someone else. So what are the costs and what are the benefits?
Costs typically start with a set-up – getting everything right, registered, and running – followed by an ongoing monthly or annual fee. These costs need to be balanced against the savings to the business – internal time spent managing the administration, and the risks of getting it wrong and incurring the wrath of the Pensions Regulator. And for the employee, the likely best service and getting the best from their pension is more likely to come from a professional and not just the best efforts of someone in the office.
So, lots of resources and services out there, but really just two choices. Go it alone, or get someone to do it for you. Whichever way you’re considering, time is running out… Auto enrolment is not optional. It is the responsibility of the employer to ensure implementation of an Auto Enrolment compliant scheme.
We recommend that you commence the process at least nine months prior to your staging date. Employers are obliged to register their scheme with the Pensions Regulator within four months of their staging date. Non compliance may result in significant penalties , ranging from £50 to £500 per day for employers with up to 50 employees. Whichever option you choose a) do it yourself or b) get someone else to do it , it is important that you allow sufficient time to collate data, assess your workforce , design and implement a compliant scheme.
Sapien Global Services specialises in outsourced payroll and accounting for small to medium sized businesses. Headquartered in London, Sapien offers a range of outsourcing services designed to provide low-cost packaged services and free up owner managers to focus on what they do best, growing and developing the business.