While most employers are yet to reach their staging dates, a handful of the very largest companies in the land have already automatically enrolled their staff into a workplace pension. Their experiences offer some useful tips on how to make the process as painless as possible.
Wishing they had started their preparations earlier seems to be the most commonly expressed regret amongst those who have gone through the process. The Pensions Regulator recommends starting to prepare for auto-enrolment at least 12 months in advance of your staging dates, if you still have that much time that is, with 18 months allowing for a more comfortable timetable. That means any employer with more than 500 employees who has not yet got their auto-enrolment roll-out strategy in place is already behind schedule.
The desire for more time is seeing some employers opting to postpone auto-enrolment. The rules allow employers to postpone auto-enrolment for a period of up to three months after their staging dates, provided certain procedures are followed, which include the serving of notice of postponement on the workforce.
Teething problems getting payroll systems to interact with auto-enrolment software has also proven a problem for some of those now past the finishing post. Not all payroll systems are of the same standard and some find it particularly difficult to facilitate the auto-enrolment process. To make matters worse, auto-enrolment is happening to many organisations just as payroll departments are having to deal with the mammoth task of implementing HM Revenue & Customs’ Real Time Information changes.
Those who have seen auto-enrolment through to completion also recommend making clear which of your partners are responsible for which parts of the auto-enrolment process. In particular, make it clear who is responsible for assessing the eligibility of the workforce for auto-enrolment. This could arguably be down to the pension provider, payroll provider or pension adviser, but if nobody is actually given specific responsibility, you could end up finding no-one has done it. Also, don’t be surprised if the quality of the data in certain parts of your organisation is not what you expected, particularly where there are multiple sites and different business units for historic reasons.
Getting your communication programme right is essential for a smooth launch, particularly as auto-enrolment will for many individuals be the first time they have ever contributed into a pension. Get it wrong and your HR department could be overwhelmed by calls from confused employees wondering where part of their pay packet has gone. One big supermarket whose staging date has already passed saw its telephone helpline overwhelmed by more than 16,000 callers in the first three weeks of going live with auto-enrolment.
Just assuming an existing scheme will be suitable for auto-enrolment is also risky. Not only may you not wish to offer the same pension scheme to all parts of your workforce, you may also find your incumbent pension provider won’t accept all your employees into the scheme. Not all providers have a business model as efficient as Now: Pensions’, which can handle the needs of employees of all income groups equally well. So think about which provider you want to partner with at a very early stage.
Auto-enrolment is a big job for any organisation. Preparation and forward planning prior to staging dates are essential to make the ride as smooth as possible. NOW: Pensions recommend that employers establish an auto-enrolment compliant scheme at least six months before their staging date.