Recent research has revealed that over three quarters (76%) of employers are finding the administrative burden of managing the auto-enrolment process to be tougher than expected.
Clayton & Brewill’s Chloe Hughes comments on the findings:
Chloe Hughes, Head of Payroll Services
“Employers are starting to understand that preparing for auto-enrolment requires a substantial commitment in both time and money – but the research by Close Brothers suggests that many have underestimated the ongoing impact of the administrative impact involved.
“Once a company has 'staged' and has an eligible pension scheme in place, the payroll team needs to check every time the payroll is run that all the right workers are enrolled and paying into the scheme and then adjust the employer and employee contributions accordingly.
“For businesses with workers on a variety of contracts such as full-time, part-time, shift work and so forth, this can represent quite a drain on resources – and most HR and payroll teams will tell you that they are already over-stretched.
“If you plan to manage auto-enrolment in-house, preparation will be key to success – and I would also recommend investing in a decent system to minimise the administrative impact.”
Staging in 2016? The time to start preparing is now..
Over 100,000 smaller and mid-sizeed businesses will 'stage' in the first quarter of 2016 – which means that planning needs to be underway now.
Here are Chloe's top 10 tips to help you prepare:
- Know your staging dates! Visit the pension regulator websiteto find out your staging date. If it's less than 12 months away you should have already had a letter from the regulator.
- Plan early if you want a choice of pension scheme. With many schemes filling up quickly, businesses need to be talking to pension providers at least 12 months before their staging date.
- Do your workforce due diligence as early as possible. Make sure you have employee contact details, including an email address where possible, date of birth and national insurance number. And work out a method for keeping this up to date.
- Check that your payroll software can cope. Plan for a 'parallel payroll' the first time – Dunelm paid the price for system failure with a hefty non-compliance penalty!
- Consult early with your employees and allow them to plan ahead for the change in their take home pay.
- Update your whistle-blowing policy. The regulator can impose hefty fines for non-compliance.. make sure you are the first to know of any problems!
- Make sure you know whom you employ. Sounds simple but think about anyone on long-term sick or employees on remote sites.
- Bring forward the cut-off date for commission and overtime notifications. Payrolls will take longer under auto-enrolment.
- Take control of the situation by planning early. If you rely on the NEST scheme you will get no help with administration or employee communication.
- Use your pension scheme as an incentive to help you recruit good people.
Need some help with auto-enrolment?
Clayton & Brewill is helping employers across the Midlands region to prepare for and implement the pension auto-enrolment legislation. For help or advice please contact Chloe Hughes on 0115 950 3044 or by email.
Clayton & Brewill is a firm of chartered accountants with offices in Nottingham, Long Eaton and Melton Mowbray. We have a specialist payroll facility to help our business clients process and manage their payroll function, including real time information reporting and pension auto-enrolment.