If you are a small company without the advantage of a HR department or dedicated payroll staff, AE can be a real burden. Hereâ€™s our top 5 tips for small firms about to tackle auto enrolment:
1. A little planning goes a long way
If you are a small business faced with the prospect of tackling auto enrolment, planning ahead shouldnâ€™t be underestimated. The Pensions Regulator recommends firms begin their planning 12 â€“ 18 months in advance of their staging date.
Leaving auto enrolment to the last minute will inevitably result in more limited provider choice, increased administrative pressure and unnecessary stress. The simple truth is the longer you allow yourself to implement the changes, the easier the process will be.
2. Donâ€™t make any assumptions
If you are planning to rely on your existing provider for auto enrolment you should speak to them early on to ensure that the scheme qualifies for auto enrolment and to confirm that they are willing to extend it to all employees on the same terms.
3. Seek help
For small firms introducing a workplace pension for the first time, it would be worth seeking guidance from an adviser who can help you identify a value for money scheme that is suited to your workforce.
While selecting an appropriate scheme is imperative, payroll providers also have a very important role to play. If your company has outsourced payroll arrangements you should contact your payroll provider as soon as possible to find out what auto enrolment support they offer and which pension providers they work with. By selecting a pension provider that is already integrated with your payroll provider, you can avoid unnecessary hassle and expense. So making enquiries early on is time well spent.
4. Cleanse your data
One of the biggest stumbling blocks in the auto enrolment process is inaccurate or incomplete payroll data. Taking the time to ensure that payroll data is complete and entirely up to date, will help avoid problems during the implementation process and beyond. Where possible, you should try and obtain e-mail addresses for all staff as issuing communications about auto enrolment via email is often cheaper and more efficient than post.
5. Give thought to contributing more than the minimum
Auto enrolment is a legal obligation but you should also see it as an opportunity. Nearly one in three small companies we recently surveyed say they plan to contribute more than the legislative minimum when they introduce auto enrolment.
More than half of those planning to pay more in believe doing so will help with the recruitment and retention of employees. This approach makes sense as high levels of staff turnover can act as a hidden drain on your profitability.