New rules oblige all employers to offer staff access to workplace pensions. NEST’s Stephen Argent shares his advice for IPG members
If you are one of the 1.2 million small employers who need to meet auto enrolment duties in the next 18 months, you might be wondering where to start. To set you in the right direction, here are the first five steps I advise any employer to take at the start of their auto enrolment journey.
1 Know what you must do and by when
Auto enrolment can be daunting, especially if you are one of the 83% of small employers who have never offered a workplace pension before. But as thousands of smaller employers have found, it doesn’t have to be challenging. To start with, it’s important to know your staging date—the date by which you are required by law to enrol your workers into a workplace pension. The Pensions Regulator (TPR) can give your staging date and there is help to work it out here
. The TPR website
also has a host of useful guides and information for employers and is well worth a visit.
2 Choose the right type of scheme
Having never offered a pension before, how can you know you are choosing a good scheme? Help is at hand. The Pensions and Lifetime Savings Association (PLSA) provides an independent assessment of pension schemes, and its ‘PQM Ready' status shows that a scheme meets its high standards on governance, charges and communications. You can find its list of PQM Ready schemes here
If your auto enrolment scheme provider is a master trust, you can check whether it has published a master trust assurance framework (MAF) report, which shows that it meets certain standards of administration and governance. TPR has a list of accredited master trusts
. Governance is important as there is a well-recognised relationship between good governance and good member outcomes.
3 Find a scheme that accepts your business
Some smaller employers are discovering that the provider they had in mind will not accept their business, or will only enrol some of their workers. Last year 35% of NEST customers said they had found other pension providers unwilling to enrol their entire workforce. If this happens to you, then remember NEST was set up by government to ensure all employers can access a high quality workplace pension scheme, no matter what their size.
4 Get a grip on pension admin
Many smaller businesses worry how they will find the time for pensions admin and get the processes right. NEST’s research shows that while two thirds (64%) of small employers are experienced in payroll issues, less than a quarter (23%) are experienced in pension issues. To help, we developed NEST web services
, a package that makes it possible to set up a scheme, enrol members and pay contributions direct from your payroll software.
5 Make sure your workers have the right info
Communication in many small businesses is direct and personal, and perhaps normally done over a cup of tea. That is one of the best things about working in a small team. However, auto enrolment has clear rules about how you should communicate with workers. It is important to remember you have a responsibility to provide your workers with some form of written communication about their new pension. It works to everyone’s benefit if the communication is clear and takes place at an early stage of the process, so that any snags can be ironed out. NEST has free templates
to help you get key messages across to your workers, in a way that complies with legislation.
For any more help with auto enrolment or NEST’s services, click here
Stephen Argent is business development manager at NEST.