Mind the capacity gap
Almost 30,000 UK employers need to take action to comply with Pension Auto Enrolment by July 2014. Short timescales for implementation and a lack of capacity in the Corporate Pensions market could put significant pressure on your business if you do not act in time.
Your legal responsibilities include:
- Scheme selection and setup – do not assume your existing scheme (if you have one) will accept additional members. Many are requiring significant changes or will decline to accept auto enrolled members.
- Worker assessment – every time your payroll is run, workers must be assessed and categorised. Internal processes will need to be adjusted and your payroll provider engaged in the strategy.
- Communications – your workforce needs to be told what is happening and why, within strict prescribed timescales.
- Administration – certifying and registering your qualifying scheme and, every 3 years, re-enrolling workers who opt out are just some of the additional duties.
- Legal Changes – 60 day pension and, in some cases, employment law consultation with employees may be required to make the changes you need. We recommend a review of your contracts of employment.
Don’t leave it too late
Financial penalties of up to £5,000 per day can be levied on employers for non-compliance with auto enrolment obligations. There are also other possible liabilities for failing to consult about changes if the obligations mentioned above apply. Think about the potential financial impact of penalties, disruption to business as usual and the strain on your internal resource if you have not acted in time.