Compliance with the new auto enrolment pension regime is a critical issue facing small to medium sized businesses.
Moore Stephens, one of the UK’s top ten accountancy firms, supports businesses of all sizes to provide quality, qualifying workplace pension schemes (QWPS) that meet all the requirements for auto enrolment.
Stuart Stroud, Director of Employee Benefits at Moore Stephens, provides an overview of what SMEs need to know, and when they need to act by.
He said: “Sixty-six per cent of small and medium sized businesses do not have any existing pension arrangements for their staff at all.*
“This highlights the need for urgent action. Many businesses assume that all they have to do is sign up to the government’s default scheme, NEST. Unfortunately this is not the case, as NEST only provides a pension scheme with a very minimal level of support to employers and does not provide compliance support.
“Under new regulation every employer, regardless of size, will be required to automatically enrol eligible workers into a qualifying pension scheme and make contributions towards it. Even if you already operate a workplace pension scheme you will still need to undertake some planning to prepare for your duties.
“There is a lot more to think about than simply finding a pension provider. For many organisations, aside from the financial cost, these new duties will create an administrative burden and tie up valuable resources – the likely impact on your HR, payroll and finance should not be underestimated.
“Businesses will need to keep a close eye on cost, changes to payroll process and internal administration procedures. Non-compliance could mean heavy penalties, which can be easily avoided with the right advice.
“When employers reach their ‘staging date’ (based on the number of staff they employ) they will have to automatically enrol certain staff into a pension scheme with an entry contribution of at least a 1% employer and 1% employee (this will increase to total contributions of 8% by 2019).
“Whether an employer chooses to use an existing pension or an alternative, such as our Auto Enrolment Solution, they will have to self-certify that their scheme and the contribution basis meets the required standard under the Pension Act 2008.”
To find out your auto enrolment staging date go to www.thepensionsregulator.gov.uk/employers/staging-date.aspx
Moore Stephens has established its Auto Enrolment Solution to take the burden out of setting up auto enrolment and provide a simple, quick and cost effective solution for employers.
*Survey conducted by NOW Pensions