Auto-enrolment has been big news in recent years, with organisations of all sizes required to set up company pensions for their employees. Although the phased staging dates for introducing auto-enrolment pensions (AE) came to a close early this year, it’s far from over for British businesses; employers need to review the schemes they have in place and ensure they meet staff needs.
“The Pensions Regulator [TPR] audits auto-enrolment schemes to ensure they’re fit for purpose,” says Auto-Enrolment Consultant Dee Myhill. “As an employer, it’s your responsibility to ensure that it’s well run. Even though you appointed an independent financial advisor to put the package in place, you are ultimately responsible for its suitability.
“If this is found to be lacking, your business can be subjected to fines of up to £400 per day. These can reach an upper limit of £10,000 for schemes that fail to meet the minimum TPR standards.”
Once your scheme has been in place for a year, you can move to a secondary market and change your auto-enrolment provider.
“If you were in the first wave of businesses to put a scheme in place you would be in a good position to do this,” Dee explains. “Five years ago, there were only one or two providers to choose from, so you didn’t have much choice about who to go with. Now many more pension providers have AE services. This brings more competition to the market, encouraging providers to offer improved services and reduced management fees.
“We find that lots of businesses have had problems with the payroll, which is important to getting the right scheme in place and ensuring that this fits with organisational processes.
“Employees also have to re-enrol every three years, so it’s a great opportunity to review your scheme and put a new one in place if there are better options available. It’s an important way to demonstrate to your employees that you have their futures in mind; you are actively managing their pensions.”
Dee has already helped several businesses find new schemes helping to reduce the management fees and enhance investment solutions.
“We’re working with organisations of all sizes to ensure that the right pensions are in place, so we know what’s available on the market and find the right fit for you,” Dee states. “We also only work with providers that are listed on the TPR Master Trust Assurance List, so you know that they meet the Regulator’s requirements from the outset.”
When it comes to putting a new provider in place, Dee explains that it can be a complex process, but an independent financial advisor, like Alan Boswell Financial Planning, can handle everything.
“Essentially you will be putting a new scheme in place, so it means starting from scratch. We can handle everything though,” she explains. “We’ll communicate with your employees, hosting presentations and Q&A sessions if you need it, so they understand the benefits of changing providers. We’ll also get signatures for all employees if that’s required.”