We're all in - well not yet, but we want to be!

Latest figures from The Pensions Regulator (tPR) indicate that more than 5 million additional employees have been enrolled into an employer’s pension scheme since automatic enrolment legislation came into effect.  Now that large and most medium-sized organisations automatically enrol staff into a Workplace Pension scheme, smaller employers are increasingly coming under pressure from existing and particularly new employees who expect to benefit from pension membership.  This has led to us seeing an increase in the number of requests from employers who say they want to bring their staging date forward.

Other reasons for bringing the staging date forward are to align the start of automatic enrolment with annual pay reviews; the company’s new financial year; the flexible benefit scheme ‘window’; or simply a less busy time of year that better suits the business.

 

Before embarking on this course, however, it is important that both the company and the pension provider will have sufficient time to prepare and can accommodate the reduced timescale. This is important because once the employer informs tPR that it will be bringing the staging date forward then it cannot be moved back. Earlier available staging dates are listed here.

 

What clients don’t always appreciate is that they could launch and start their pension early on a voluntary basis (i.e. a ‘soft launch’) and then automatically enrol remaining staff at their original staging date. 

 

The soft launch enables an employer to benefit from considerable employee goodwill (if communicated effectively) as a result of starting pension contributions early; defers the contribution cost for any employees who do not join voluntarily at outset, and allows extra time for automatic enrolment to be communicated to staff in advance of the staging date so that it comes as no surprise to existing employees.  

 

Ian Willans
Business Development Consultant
Telephone: +44 (0)20 7893 3456
Email: contactus [@] broadstoneltd.co.uk

So Here It Comes

I don’t know how large your company is, but for the majority of medium sized employers in the UK, auto-enrolment crunch time is 2014. By the time you read this, approximately 18000 employers have been through this process. 

Now this sounds a lot, but it’s the equivalent of the employers staging in six weeks of 2014.

Pension providers are about to get busy and you should start hearing more about the “capacity crunch”. 

We will start seeing something that no one outside the pensions industry expected – providers turning business away in droves.

For pension providers it’s simply a case of profitable business, with some small employers paying minimal contributions, it’s just not in their interests to open a new pension scheme, their break even time on that business might stretch up to ten years.

So who will take the business and who will still be standing at the end of 2014?

Rob Barksfield

Auto-enrolment Consultant

Telephone: +44 (0)20 7893 3456

Email:  contactus@broadstoneltd.co.uk

Auto-enrolment – No Minister!

The Pension Regulator (tPR) published its first in-depth analysis of the initial implementation of auto-enrolment a few months ago. 

It revealed that in July it had launched investigations into 89 employers for possibly failing to comply with the Government's new rules, issued 38 warning letters and one enforcement notice. 

If large companies have struggled to understand the complexities surrounding the new legislation how many medium and small employers are likely to fall foul of the Regulator when it's their turn to stage?

A year on from the launch of auto-enrolment we will begin to see the volume of employers hitting their auto-enrolment staging date rising dramatically with many having little or no experience of workplace pensions. In May 2014 alone 12,000 employers are scheduled to stage with the vast majority having a fraction of the resources available to them that larger employers, who have clearly struggled, have had at their disposal.

Against this backdrop the message from Steve Webb, the Pensions Minister, has consistently been that the auto-enrolment regime has been set up so that ‘nobody needs to pay for advice’ and that the government has ‘legislated for quality’ particularly with the default option that the National Employment Savings Trust (NEST) has been designed to provide.

Our experience to date strongly suggests this is not the case. BROADSTONE’s view is that it is totally unrealistic for employers to plot a path through auto-enrolment without guidance from an experienced advisor. As the number of employers looking to stage increases sharply this will inevitably place a strain on advisors capacity to assist leaving short supply (and potentially increased fees) for employers that leave it late.

So sorry Minister we would strongly advise that employers seek to engage with an advisor as soon as possible rather than attempt to navigate their own path through auto-enrolment. This will avoid a rushed (or failed) implementation and the potential to fall foul of the Regulator.

If you’d be interested in discussing how we can help you please contact me.

Mark Howlett

CEO

Telephone: +44 (0)20 7893 3456

Email:  contactus@broadstoneltd.co.uk