Easy enrolment - part one

Know your staging date
Know your staging date

Awareness around pension auto-enrolment among SMEs is higher than ever, but do you have your plans and processes in place to take the steps towards implementation?

He is coloured blue, green and purple; he is fluffy, very wide and extremely tall. He is Workie, the Sugar Puff style monster starring in a series of TV adverts from the Pensions Regulator, and according to at least one industry expert, responsible for turning around SME attitudes to workplace pension auto-enrolment.

“That strange creature has done more in a couple of months than I have in 10 years,” laughs Steve Herbert, head of benefits strategy at Jelf Employee Benefits. “The awareness of pensions auto-enrolment is now much better than it was.”

Being ‘aware’ is important. Under the Pensions Act 2008, every UK employer must put certain staff into a pension scheme and contribute towards it.

According to the Pensions Regulator, which says the policy was introduced to address the millions of people not putting aside enough for retirement, “whether you’re a hairdresser, an architect or employ a personal care assistant, if you employ at least one person you are an employer and you have certain legal duties.”

Know your staging date

From October 1 2012, employers with more than 1,250 employees had to have them enrolled. This was their so-called Staging Date.

October 1 2013 marked the Staging Date for those employing between 250 and 1,249 and between April 2014 and April 2015 for those with between 50 and 249 employees.

The Staging Date for those employing 49 and below is between June 1, 2015 and April 1, 2018.

According to the Regulator, more than six million workers have now begun saving into a workplace pension as a result of automatic enrolment. That equates to more than 100,000 employers.

Minister for Pensions, Baroness Ros Altmann, said recently: "So far it has been those working for big firms, now the challenge is to make sure small employers set up pensions too.”

Director of automatic enrolment at The Pensions Regulator, Charles Counsell, says: "The roll out of automatic enrolment has proved successful so far, with more than 90 per cent of the first 12,000 small employers required to put their staff into a workplace pension now complying with the law.”

However, the Regulator warns that smaller employers are more likely than their larger peers to “leave things until the last minute and this means they are more likely to receive a compliance notice, which could lead to a fine”.

The regulator can issue a fixed penalty of £400 to an employer.

Herbert of Jelf shares these concerns. “The first bridge, which was awareness among SMEs has been gulfed, but most are still not fully prepared or understand how much work there is to it,” he says. “An awful lot don’t know their staging dates or if they have been told they have forgotten it. I want to give SMEs a call to action. Do it now and do it early.”