Auto Enrolment (AE), the scheme by which millions of workers are being automatically enrolled into a workplace pension by their employer, has been a great success so far. The big businesses who have already joined the scheme have found that relatively few of their employees have wanted to opt out. (For more details see our blog ‘Auto-enrolment: 5 top tips for employers’)
However, small business owners are in danger of missing the deadlines because they have too many other competing priorities and just aren’t interested in auto-enrolment yet. It is true that small and medium-sized enterprises (SMEs) with less than 50 workers will not need to enrol their staff until June 2015 at the earliest. But even the smallest employer has a quite lengthy ‘to do list’ for auto-enrolment (changing contracts, for instance, which needs a 3 month consultation period) and, given how busy you probably are, it will take some time to complete.
Here are 5 reasons why you need to think about Auto-enrolment now
- It costs more not to comply. You can incur a fine of up to £5,000 personally and your business could be fined £50,000 if you do not hit the dates set by The Pensions Regulator (TPR).
- You may be ‘named and shamed’ by TPR. This might be the biggest piece of PR your business has ever received, but that’s not good
- TPR knows who you are and where you are. It has already written to you with your staging date so it knows where you live.
- If you cannot afford auto-enrolment, then you need to talk to an insolvency practitioner about the future of your business.
- It might be a bit boring, but you still have to do it.
If, having read this blog, you’re still not sure exactly how you are going to approach auto-enrolment, then please call Marchwood IFA now and ask us to review your auto-enrolment plans. We can help you through the whole process, particularly the selection of the right pension scheme for your employees and how to clearly communicate its benefits.