Auto Enrolment is more than just a new pension scheme. Employers are responsible for a broad range of duties that need to be completed before staging. Pensions regulator demands that employers to start to prepare for Auto Enrolment at least one year in advance of the staging date. You can click here to learn more. The following steps are a proven strategy that should be carried out by employers in advance:
Create a Plan
First, you should pull a team together that handles managing of the Auto Enrolment project. The role of the team is to review the current situation in detail. The information can be used to develop your project plan. By using a defined plan, you can ensure that all your issues are covered. Every member of project understands individual responsibilities. This is necessary to ensure your project plan is delivered on time.
Assess the Workforce
The Pensions Regulator introduced three main classes of workers that are based on the employee’s earnings and age. Employers have a different set of duties for every category of workers. Therefore, it is essential to assess your workforce in advance as much as possible to determine your responsibilities towards each employee.
The major cost of business is employer contributions. Standard contribution is at the rate of 8% of the qualifying earnings. This is made of 4% employee contribution, 3% employer contribution, and 1% tax relief. There are many options that make the process cost-effective. It is necessary to carry out serious of calculations to ensure the scheme is set up in a cost-effective manner
Review of Internal Processes
Auto Enrolment has a huge impact on the employer’s internal processes. The employer ensures that HR systems and payroll are integrated into information systems of the provider. Your internal infrastructure copes with managing responsibilities. This is to ensure that employees and starters who opt in or out are catered for. Taking into account these issues in advance ensures seamless delivery and successful launch.
Employers are tasked with providing relevant communication to all categories of the worker. This is to ensure that they understand implications of Auto Enrolment. Strict guidelines and regulations are set to ensure timely delivery and providing content of communications. Having well-planned strategy is important as it ensures compliance with the relevant authorities. This also raises awareness among the employees of the various benefits into the workplace pension scheme.
The final step is testing and implementing the scheme. This step is often overlooked. All processes and systems need to be tested thoroughly to ensure any problem is identified and rectified.