Planning for auto-enrolment in 2014/15 – five key considerations
In this article Melissa Goddard, Director of Pension Solutions at Ceridian, offers guidance in five key areas of consideration to employers that are planning for auto-enrolment staging dates in 2014 and 2015.
The auto-enrolment ‘to do’ list is a long one and takes time to systematically work through. The experience of NEST indicates that just over half of employers have spent more than 10 months preparing for the reforms, with almost a quarter taking more than 16 months. You may need more time than you think, so make time in your diary to plan!
The Pensions Regulator has a great tool on their website to assist in planning an auto enrolment project.
Know ALL of your dates
It’s not just enough to understand when your staging date is. You need to know your key company dates such as pay reference periods and payroll cut offs; as well as your communication deadlines. Documenting these dates and then overlaying them with dates by when actions need to be completed, as a result of the legislation, will help you to understand the impact on your business.
Ensure data quality and system readiness
It is easy to underestimate the complexity of the data required to make auto-enrolment work – you need to pull together data for employee eligibility assessment, joining, contributions and opt outs, which will inevitably come from different sources. Ensure your systems, particularly payroll, are ready and equipped for your automatic enrolment needs.
Karen Thomson, associate director of policy, research and strategic visibility at the Chartered Institute of Payroll Professionals (CIPP), said:
The payroll function is best placed to examine the age and earnings of a workforce and determine the number of workers to be automatically enrolled. In addition, payroll can establish the date that workers become eligible for contributions, calculating those contributions and managing refunds to workers who’ve opted out. It is essential that your payroll system can stand up to these new challenges and functions. Take the time to properly examine them and if they aren’t doing the job, act fast to rectify it.
Communicate with staff clearly and early
Communication is critical. You should communicate with staff clearly, in a way that they understand and can relate to, and have a communication plan that includes all relevant departments in your business. Engaging with employees and clearly communicating the changes in advance of auto-enrolment will go a long way to making sure that when it does happen, employees will appreciate the value your contribution is adding, while also reducing employee questions.
Engage with key partners
Finally, don’t be shy in coming forward to ask for help. Whether that is from a pension’s adviser, financial adviser or even your payroll provider, you will almost certainly need guidance and advice from experts and external consultants.
But, remember to do it early – much has been reported about the “capacity crunch”, the point at which demand exceeds the industry’s capacity to process auto-enrolment. Many people actively involved in the sector believe this point has already been reached; further fuelled by rumours that one or more of the major pension providers will withdraw from the market for economic reasons.
With Ceridian’s award winning Auto-Enrolment Solution which has been streamlined for smaller businesses, you can automatically identify and enrol relevant employees into your chosen pension scheme and calculate contributions – taking data directly from your payroll to ensure the upmost accuracy and ease.
Contact us online to find out how it can work for your organisation.