NOT PLANNING AHEAD FOR AUTO ENROLMENT COULD COST YOU BOTH TIME AND MONEY
With the Government’s new auto enrolment pension legislation now starting to have an impact on smaller firms, its essential that employers do not underestimate what is involved, writes Bevan & Buckland’s Financial Planning Manager, Gareth Tregidon.
Auto enrolment is set to have a significant impact on businesses’ cashflow over the next 4 years. Whilst the initial contribution rates for employers enshrined in the legislation don’t seem too harsh (at 1%), this is set to rise to 4% or higher by 2018. And although proper cashflow planning will be the most important factor, employers cannot ignore the research, due diligence, registration and ongoing administration involved.
Please remember that choosing a pension provider is only part of the process. Even where you have an existing scheme it is not necessarily the case that you can relax, as not all pensions are compliant with the legislation. In all cases you will need to show that you have undertaken some form of due diligence in selecting which provider you will use. In an increasingly litigious society, you never know what the Government, regulators or a disgruntled employee may do in the future, so it’s essential you have documented the process you have gone through.
The Pensions Regulator’s website (which can be found here) provides a lot of useful information, including details of the steps employers will need to take to comply with the legislation.
Bevan & Buckland are running free monthly seminars for employers to explain auto enrolment, and the steps you need to take to comply with the legislation. If you would like further details, or to book a place, please visit the Events section of our website which can be found here.
Most importantly, don’t leave it too late! The process of making sure you prepare for auto enrolment is very time consuming, and can take several months to complete. Although The Pensions Regulator should write to all employers 12-18 months before they become affected by the legislation (known as the firm’s “Staging Date”), we have several examples of businesses where this hasn’t happened. Unfortunately, not having received the letter is no defence against the significant fines that the legislation allows the regulator to charge for non-compliance.
As you would expect, Bevan & Buckland have a comprehensive range of services designed to help employers through the auto enrolment process, from basic advice & guidance to undertaking all of the work for you. Our menu-based service allows you to choose which aspects you want to do yourself, and which you would like help on, meaning that you can do as much or as little as you want. For further details please contact either us and we will be happy to talk you through what we can do to help.
Gareth Tregidon is manager of Bevan & Buckland’s Financial Planning Department, which operates from the firm’s Swansea, Pembroke and Haverfordwest offices. The department provides fee-based advice to personal and business clients, both from within the firm and elsewhere.
Gareth is a Certified Financial PlannerCM and an accredited Later Life Adviser with the Society of Later Life Advisers (SOLLA). He is former Chairman of the Institute of Financial Planning in South Wales, and an assessor for the internationally recognised Certified Financial PlannerCM licence.
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