5 February 2013

Pensions

Auto enrolment Staging dates - can you learn from those that have gone before?

While most employers are yet to reach their staging dates, a handful of the very largest companies in the land have already enrolled their staff into a 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 date.

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.

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 company 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.

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 the Printing Industry Pension Scheme (PIPS) which can handle the needs of employees of all income groups equally well. Preparation and forward planning prior to staging dates are essential to make the ride as smooth as possible. The regulator recommends that employers establish an auto-enrolment compliant scheme at least six months before their staging date.

Auto-enrolment is a big job for any size organisation.