Ernest Grant

The Government has introduced changes under workplace pensions reform legislation that are designed to enable more people to save for their retirement. The main aim of which is to combat the issues surrounding the ageing population and the limited nature of State pension provision. The Government estimates that around seven million people are currently under-saving for retirement.  In excess of six million people have already been automatically enrolled into workplace pensions since 2012.

You can prepare now by gaining a thorough understanding of the legislation and its potential impact upon you and your company. If you’ve already ‘staged’ we can also help assess your pension scheme and the processes you are using to ensure best practice and compliance.

Key considerations for your business:

The decisions you make will have a substantial bearing on how easy your processes are to manage as well as the overall cost of implementation, including systems, time and of course increased contributions.  Areas you may need to consider include:

• Contributions: What contributions basis will you use for automatic enrolment?
• Salary Sacrifice (exchange): Will you operate salary sacrifice for your auto enrolees?  Is this suitable for the demographic of your workforce?  Is this on an opt-in or an opt-out basis, either way how will you communicate this compliantly with your staff?
• Auto Enrolment Strategy: Do you wish to use postponement periods? If so, will this be applied to all staff or certain sections of your workforce?  How will you deal with opt-ins and joiners?  What about workers you employ after your staging date?
• Assessment: How will you manage the assessment process for your workforce in each pay period (pay reference period)? Do you need any additional resources (people / systems / expertise)?
• Pension Scheme: Occupational, contract based or master trust solution? How do you intend to make the important decision of choosing your automatic enrolment scheme? Will you offer a split scheme solution?
• Communication: How will you produce and distribute the legislated communication requirements and be able to prove you have done so? How do you plan to engage with employees? Do you wish to provide them with advice or a conduit to ask questions?
• Systems: Does your current mix of systems (HR, Payroll, Pension Provider) offer a complete solution to help you fulfil your requirements? If not, do you have sufficient resources to work around this or will you need to consider a ‘middleware’ solution to link up to your existing systems.
• Governance and Audit Trail: How are you going to capture the information needed to satisfy your reporting requirements to The Pensions Regulator (TPR)? If TPR pay’s a visit are you confident that you can prove you are meeting all the legislative requirements?
• Compliance: Are you confident that all your registration requirements have been / will be fulfilled and that any such salary sacrifice scheme is HMRC compliant?

We can provide realistic solutions to help comply with the legislation and take the sting out of the potential costs surrounding it. Whilst helping build solutions, we also deliver effective process and communication, turning the complex and costly legislation into a valuable employee benefit.

For more information on Automatic Enrolment please refer to our useful links below:

The Pensions Regulator – detailed guidance.

Find out your Staging Date.

Workplace Pensions are regulated by The Pensions Regulator.