Don’t Panic! Zen and the Art of Auto Enrolment

Mike Spink

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There has been a lot of commentary in the press recently about employers’ obligations in relation to auto enrolling their staff into a suitable pension arrangement.  Many of these articles seem designed to create panic at businesses who may not have got round to considering how they will implement auto enrolment yet.

We at Spence & Partners think panicking about auto enrolment is a very bad idea. Indeed, we think it’s such a bad idea that we thought we should put the words “DON”T PANIC” in big red letters at the top of this note.

Just so it’s clear where we stand on the point.

Auto(matic) Enrolment – an oxymoron for our time

You may have taken no action to date because you assumed automatic enrolment, to give it its full title, will happen, as the name suggests, automatically. Unfortunately, the process will be automatic for your employees, but it will be anything but automatic for you.

We do think that you need to engage with auto enrolment sooner rather than later. There are pitfalls and problem areas, but nothing insurmountable, if you start planning now.

One date you can’t afford to miss

Staging Date. Sounds innocuous enough. But it’s one date that companies need to have circled in red on their calendar long before they get there. Why? Because, for every UK Employer, the Staging Date heralds new legal obligations in relation to pension provision – and there can often be a lot to work through before the day when the new laws bite.

The good news is its easy to find out when your staging date is, if you don’t already know it – just enter your PAYE reference on the web page below:

Or ask us to find out for you.

Now you need a plan

Once you know your staging date then you can plan how to implement auto enrolment in your business. This can be the trickiest bit as, like many firms, you probably do not to have the internal resources of larger companies to tap into to help you comply with these new requirements.

And you have probably read somewhere you can be fined if you don’t comply. And the bad publicity from such a fine would be terrible. And your workface will probably be very unhappy if they feel you’ve sold them short on pensions. And……

….. at this point we would refer you back to the words in large red type at the top of the page.

Breathe easy – help is at hand

Spence & Partners can take a lot of the pain out of the auto enrolment planning and implementation process for you.

Here’s how:

  • Honest assessment: we’ll draw up a Project Plan for you and explain what has to be done by when, to get you over the line. We can’t guarantee that the news will always be great, but the sooner the position is understood, the more engaged everybody seems to become. That’s a pretty good first step.
  • Get the team together: our Project Plan will suggest the internal resource and external suppliers who need to get round the table. You need to appoint a Project ‘owner’ from within the Senior Management Team. We now have a Project Team focussed on getting the job done – better by the minute.
  • The bottom line: SMEs will need the low down as early as possible. We can model likely additional pension costs under various scenarios to help with your business budgeting over the next few years.
  • Pension expertise: apart from project managing the exercise, we have all the pension and market expertise you’ll need to review your existing pension arrangements or consider procuring a new pension scheme.
  • Auto Enrolment experience: Auto Enrolment is far more than simply offering a pension scheme to staff. Helpfully, we have deep experience of guiding clients through the complex Auto Enrolment Regulations.
  • Fixed fees: once you’ve decided the split of responsibilities within the Project Team, we’ll provide you with a fixed fee for our part of the deal so that you have cost certainty.

Zen and the art of auto enrolment

So you have reached a fork in the path to auto enrolment and are faced with the following options.

  • The path of continued detachment will lead to a frantic period of unbearable pressure resulting in, in all probability, failure to comply.
  • The path of enlightened engagement leads to a professional, structured and calm approach to meeting your auto enrolment obligations.

As the Chinese philosopher Confucius noted “Success depends upon previous preparation, and without such preparation there is sure to be failure.

Choose wisely!