Employers – are you ready for the year of the capacity crunch?
17 Dec, 2013
Creative Auto Enrolment is urging SME employers to put preparation for auto enrolment at the top of their New Year’s resolution lists, as 2014 is set to be the year of the ‘capacity crunch’.
Businesses with between 59 and 499 employees must ‘stage’ for auto enrolment between 1st January and 1st November next year*. With an unprecedented demand for workplace pension schemes expected next year, there is a very real possibility that the industry will not be able to cope and will have to turn businesses away.
This ‘capacity crunch’ may mean that employers will struggle to enrol their employees into a scheme by their staging dates and face fines as a result.
“We’re receiving ‘distress’ calls from companies completely unprepared for auto enrolment on a daily basis now” comments MD David White (pictured). “Businesses need to think about every aspect of auto enrolment to make sure they’re ready for their looming staging dates.”
“But what really worries me is the supply and demand mismatch that we’re expecting. 36,000 companies must stage during the first half of next year – that’s six times the usual number of pension schemes. And the possibility of pension charge caps could make it even more of a challenge for SMEs to meet their requirements in time as providers look to do business with bigger companies. If I had one message for business owners it’s this: avoid the capacity crunch by getting yourself in a provider’s queue, now.”
There are 33 administrative tasks involved in getting ‘auto enrolment ready’. From setting up payroll systems to choosing the correct pension scheme for employees, businesses need to fully understand the extent of the task. Creative Auto Enrolment is therefore offering these top five tips for businesses staging in 2014:
1) Appoint someone to handle the process
Decide who will be taking control of the all tasks involved and make sure they know when they need to be completed to ensure you meet your auto enrolment deadline.
2) Get in a queue!
The industry is predicting a capacity crunch as a high volume of businesses stage for auto enrolment in such a short space of time. Get in the queue of an adviser and provider now to ensure you have a scheme secured.
3) Communicate effectively
90% of calls to Creative Auto Enrolment’s employee helpline are questions about opting out and with hefty fines for even inadvertently coercing employees to opt out, have you considered how you’ll handle those conversations?
4) Bust the myths
Did you know postponing doesn’t change your staging date? Make sure you don’t get caught out by the auto enrolment myths.
5) Ask for advice
Preparing for auto enrolment is a huge and complex task, with 250 pages of guidance from The Pensions Regulator. Consult your IFA or business adviser, or find a solution to help you with preparing for your staging date (and the ongoing responsibilities of auto enrolment).