The idea behind auto enrolment is to encourage people to build up a good level of pension savings to support their retirement. While the state pension provides a safety net, for most it isn’t enough to ensure a comfortable retirement. Having additional savings to supplement the state pension built up through a workplace pension will go a long way to making sure people can live more comfortably in retirement.
Employers have to contribute 1% of an employee’s qualifying earnings to the pension scheme, which will increase to 3% over time. Employees will also contribute 1% of their qualifying earnings, rising to 5% over time. Because auto enrolment is the responsibility of, and facilitated by the employer, it is in essence an employee benefit.
Subjects to consider about auto enrolment
For small businesses, tackling auto enrolment can feel like a bit of a burden. But auto enrolment is a legal requirement and not complying can result in fines from The Pensions Regulator. As there’s nothing you can do to avoid it, try turning an obligation into an opportunity and look at it from a different perspective. You have to do it so why not make the most of it by turning an employee benefit into a business benefit.
Here are a couple of things to consider:
- Focus on finding an auto enrolment provider that delivers the best outcome to your employees while making it as easy for you to manage as possible. You should look for a provider that can support you throughout auto enrolment.
- Make sure all employees understand the benefit the company is providing them with. Talk to them about auto enrolment and pension saving so they understand the value of the benefit you are providing and the importance of remaining in the scheme.
- Auto enrolment is complicated and no matter what your pension provider promises, and what systems you use; it will definitely require some work on your part. Fortunately there’s a lot of fairly simple things you can do to make auto enrolment as hassle free as possible and the sooner you start planning, the easier it will be.
Auto enrolment is not a choice, but how you go about it is. Make the right choice.
These Top 5 tips to make auto enrolment workplace pensions as hassle free as possible could make all of the difference when ensuring a smooth auto enrolment ride.