Auto-enrolment: What do employers need to consider?

Watch a video about auto-enrolment.
What do employers need to consider?
There are a few things that employers can do to prepare for auto-enrolment. Firstly and probably most importantly, they’ll need to budget for the start of the scheme and in the years going forward. If you operate a pension scheme in your business already, but not all of your employees are enrolled, it’s very likely that they could be enrolled in the new scheme. This means that you could have two schemes operating side by side for your employees. It also means that if there is a waiting period for your pension scheme, employees could be automatically enrolled during this time. If this happens, and your employee subsequently wants to join your scheme, they will be able to do so at any time. Although there shouldn’t be any major problems with operating two schemes side by side, it might be preferable to have all of your employees in your existing pension scheme. Therefore now is the time to encourage your employees to join your existing scheme. Payroll software will be used to enrol employees. Closer to the start of the scheme, payroll software companies will update their software to facilitate this. This will help to ensure that employees can be enrolled as smoothly and seamlessly as possible, and that you are compliant with your obligations. We will be running nationwide advertising campaigns this year to reach as many people as possible so that they know auto-enrolment is coming. However, you might want to consider communicating this to your staff directly. By being proactive you can ensure that staff are well informed about contributions that will be coming out of their wages so that they can begin planning. This will also mitigate the risk of employees questioning why there is an additional deduction from their pay packet.