New pension regs – ‘there is no do nothing option’
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ARE you aware of the new auto enrolment legislation? Our recent research shows that 31% of businesses either do not know about it or don’t think it applies to them. With daily fines for businesses that do not comply, you cannot afford to be in that group.
The background Under the Pensions Acts of 2008 and 2011, all businesses, regardless of size, will have to automatically enroll qualifying workers, aged 22 and over and earning more than £8,105, into a company pension scheme. The legislation comes into force at different times for differently sized employers (see box). These “staging dates” have been put in place to ensure everyone has a sensible amount of time to prepare for the changes and you should make the most of the time you have. What you need to think about • Timings. What deadlines apply to your business? When is your “staging date”? • Existing schemes. Will any current pension scheme be suitable and affordable or is a new approach required? • Communications. From July 2012, all businesses already have new responsibilities under ‘Safeguarding Individuals’. You must communicate effectively and impartially to all of your employees. Do they have the right experience and knowledge to make pensions decisions? How will you manage the audit trail? • Costs. Auto enrolment means a compulsory 3% employer contribution for all employees. There will also be administration and other costs. How will you cope with these? • Administration. What do you need to do and how will you do it? Would it be more cost-effective to delegate to someone else? For further information please contact David Hodgson, Financial Management Director on +44 (0)7921 840 023 or david.hodgson@rsmtenon.com
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