The latest update for you from Victoria Robinson Dip PFS, independent financial adviser with Chase de Vere...
Auto enrolment pension legislation started in October 2012 with the country's largest private sector employers and is now gathering pace with smaller companies having to provide compliant pensions for their staff. Over 1.1 million small and medium sized business are going to have to comply with AE, with up to 60,000 a month 'staging'.
If you haven't heard from The Pensions Regulator already you will soon be receiving a letter giving you your staging dates and a warning you will have just 12 months to act to be compliant. The fines for those who get this wrong are going to be very expensive with a company of just 25 staff having to pay £500 a day if they are found to have a non-compliant scheme or no scheme at all.
Victoria Robinson Dip PFS, independent financial adviser with Chase de Vere says "the first thing every employer needs to find out, is their staging date. This is fixed with the Pension Regulator and is based on the number of staff they had in April 2012"
Amongst other duties, employers will need to assess their workforce, establish a certification level of contributions, find a provider and ensure they issue all the correct communication to their staff, before automatically enrolling some, and offering to enrol other employees, deduct contributions from wages, and then reassess with every pay round.
Victoria adds "The compliance side to the new legislation is where people are going to struggle and may well need help. Demand for schemes is going to be very high and the pension providers are already saying that they will not be able to cope with the levels of applications - some have already closed their doors to new business."
As well as the traditional pension providers there are some new 'super trusts' available to provide pensions including the Government backed 'Nest' scheme, 'Now' and 'The People Pension'.
"I would urge any business owner or MD to start their AE process NOW" Victoira added "even if they are not staging for 18 months. The massive demand that will be generated by the 60,000 business staging each month means that suppliers, advisers, and systems won't be able to cope and you do not want to risk fines. Start planning now, and you can have everything in place, with budgets worked out and be ready for your staging date - leaving you to concentrate on running the business!"