Auto Enrolment has been heavily discussed for a number of years. There have been a number of TV campaigns raising awareness and imploring individuals not to ignore it and yet despite this, there is still much confusion.
Auto Enrolment is steeped in regulation, obligations and statute and is supported by a proactive regulator which frequently writes out to companies warning them of their duties and yet there is a lack of understanding as to who it applies to and what they have to do.
The confusion seemingly surrounds both ‘who’ and ‘what’ however in simple terms, the ‘who’ is ‘any business who has workers’ but even those with no employees still have things to attend to.
The ‘what’, however, is where the real confusion lies ….. given that it may be either nothing, something or everything!
Which of these will depend on the structure of the business and the age and/or earnings of the workforce.
Even if a business is exempt and has to do nothing, they still have to report to the regulator they have to do nothing (therefore in reality, those who have to do nothing still have to do something – albeit it’s a one off notification)!
For those that have to do everything, this involves (briefly!) setting up a pension scheme, assessing their workforce, enrolling those who are eligible automatically into a pension scheme, communicating with their workforce (perhaps twice!), telling the regulator they’ve done this and then continually assessing their workforce and dealing with leavers/joiners/opt in and opt outs (amongst other things) over the coming years.
These duties therefore generally need to become ingrained in their business processes.
For those who have to do something, they may find that the only thing they don’t need to do is set a pension scheme up – pretty much everything else still applies.
In practice, therefore, Companies may think that because they only have a couple of employees who earn below the Automatic Enrolment threshold of £10,000 per annum they don’t have to do anything. In fact, they are subject to precisely the same regulation and duties as companies who have employees earning above this threshold and therefore doing nothing is not an option.
Once their start date is reached, the Regulator will be waiting to receive confirmation as to what they have done.
Doing something is therefore their only option.
As we are now dealing with smaller businesses we are finding that many misconceptions are held which means that companies are in danger of doing too little too late – perhaps even missing their start date.
Our guidance is clear – if you think it doesn’t apply, check with someone who knows – in a 5 minute phone call we can quickly sort companies into the ‘nothing, something and everything’ categories so that, rather than being blissfully unaware, they are in an informed position ready to face the regulation about to apply to them.