In January, Rachael Power published an article outlining the efforts that The Pensions Regulator (TPR) is taking in order to increase SME compliance with auto enrolment guidelines; including the necessary prep-work for their auto enrolment staging dates. Failure to properly prepare for and complete the auto enrolment process can result in hefty fines for businesses in the UK.
If you want to avoid the fines and penalties levied by TPR for failing to comply, follow these simple tips:
1. Designate a point of contact
To keep things running smoothly, you’ll need to designate an individual at your firm to serve as the registered point of contact. They’ll receive notices outlining any changes or requests from TPR. It’s best if this individual is someone that actually reads their mail on a regular basis.
2. Identify and confirm your staging date
How can you hit a target if you don’t know what you’re aiming for? Based on the size of your firm, and employee eligibility, you’ll be assigned a date for enrolment. Your designated point of contact should receive a letter with the assigned date for your company; you can always contact TPR to confirm.
3. Provide encouragement to employees
Did you know that discouraging employees from enrolling in the pension scheme can result in fines and penalties? Your employees are entitled to take part in any pension program they’re eligible for. It’s your job, as an employer, to ensure that your team is taken care of.
Don’t make the mistake of trying to cut-costs by encouraging employees to decline the pension program, or fail to adequately prepare your team for enrolment.
4. Create an Up-To-Date list of employees eligible for the state pension
To ensure compliance, you’ll need to keep a list of employees that meet certain criteria. According to Smart Pension, any employee that meets the following criteria should be enrolled:
- “Employees who are younger than the normal state pension age, and 22 or older.”
- “Employees whose income per year is more than £10,000”
- “Employees who are employed in the UK.”
5. Select a pension scheme ahead of time
After you’ve identified your staging date, and the employees that should be covered, you need to select a pension-scheme for your firm’s employees to enroll in. Because different schemes are designed for different sized organizations, it’s recommended that you confirm you’re eligible for the selected scheme before your enrolment deadline.
6. Provide employees with accurate, detailed information
Your employees are placing their trust in your ability to select the best pension scheme for their needs. The information you present to them should be well-researched, verified and easy to understand. If you’re reading the information for the first time, at the same time as you’re presenting the information to them, it will appear that your decision was given little attention.
You need to instill confidence and provide accurate information. Don’t get stuck flipping through pages to look up answers to common questions. Many companies allow their employees to review the information for their pension scheme online. This allows for employees to digest the information at their pace and answer their own questions.
Have the pension scheme’s customer service number available for your employees, in case they have questions you can’t immediately answer. The last thing you need is for an employee’s unanswered question to cause a delay in auto-enrolment.
As long as you take the time to properly communicate with The Pension Authority, you’ll be well on your way to insuring workplace pension compliance. Do the research, find the best plan for your team, and confidently present the information they need to enroll. Your employees will view you as a sterling employer, and you’ll avoid TPR’s costly fines.