Auto-enrolment moves into secondary phase. Why SMEs may need help
The first phase of auto-enrolment, which started back in 2012, is pretty much complete, so now the process moves onto phase two.
From October onwards, new businesses that have at least one employee and are not already enrolled will need to set up a workplace pension scheme within their first five weeks. The option of staging dates which could be months into the future will no longer apply. Getting help and advice may make sense for many.
For those companies that have already enrolled, hopefully it has gone well, but some may have experienced teething problems and could well be looking to re-visit or finesse the processes and arrangements that have been put in place. They may also want to revisit payment methods (basic pay and qualifying earnings) or even look at salary sacrifice as an option.
There is also a need to ensure that employees are fully engaged and as advisers, we can help by providing advice to your employees who become members of your scheme. This will become particularly important next year when the increases in contributions come into effect. It would also be important should you decide to change the provider of your pension scheme.
Because when it comes to the pension scheme itself, at this stage, there could be several reasons why you may need to review and switch pension providers. Not all business owners will have carried out full due diligence when initially selecting their provider. As the first phase issues of set-up and compliance get sorted, the focus now needs to switch to the real issue behind it all - the pensions scheme itself.
A recent article in the Daily Telegraph highlighted some of the potential problems facing employees when it comes to the suitability of their workplace pension fund. Some SMEs will have already sorted their choice of pensions scheme to the satisfaction of themselves and their employees but others may have been too focused on meeting staging dates and compliance and so now need to re-visit this.
We can assist SMEs both with helping to choose the right pension scheme and with the switching process. Amongst other things, we would look at the overall suitability of any proposed scheme, including costs, along with the investment options offered. We would also look at the scheme's flexibility and fit, both with your employees needs and with the current pension freedoms.
In such circumstances we can also help with the overall employee communications process, looking to ensure that your members' individual needs are taken into account and that their best interest are protected at all times.
There is also the ongoing issue of the cyclical re-enrolment process and the need for governance standards. This whole complex process takes up a big section of The Pension Regulator's Guide, so it may well be that many smaller employers decide to delegate this process too.
For all businesses, it has to be recognised that auto-enrolment is here to stay and will remain an ongoing and often complicated process. Some companies may be fully equipped to deal with this but many others may not have the time, expertise or resources to do it all by themselves. If you are one of those companies, why not contact us for an initial free chat, without obligation, to see how we might be able to help?