Talk Money Week 2019: Helping SMEs tackle auto enrolment
Talk Money Week, which ran from 18-22 November this year, aimed to get the UK talking about financial wellbeing. This year’s focus was to encourage people and businesses to open up about pensions – a vital part of preparing for the future, including retirement.
The week is held because money is often still a taboo topic, with many working adults preferring not to talk about financial issues. Organisers say that 22 million adults do not feel they understand enough about pensions to make decisions about saving for retirement.
We want to help encourage the conversation around auto enrolment and what this means for small businesses. If you’ve recently started a business, you are now required by law to provide a workplace pension scheme for employees – any worker earning over £833 per month or £192 per week and aged between 22 and state pension age must be automatically enrolled. Small businesses must comply with auto enrolment even if they already have a group pension scheme.
For Talk Money Week, we’re answering some important questions to help small businesses deal with auto enrolment.
What are my responsibilities as an employer?
For any employer, you have the responsibility to communicate the new pension rules to staff in a formal written letter, assess staff eligibility and enroll all eligible staff, each pay period. If you have eligible staff to enroll, you must set up and register a pension scheme suitable for auto enrolment. You must also register your business with The Pensions Regulator – who will confirm your staging date which is the deadline for complying with your auto enrolment duties.
How do I decide on a pension scheme?
There’s a large difference in pension schemes regarding cost, benefits and investments – unless you’re using an existing scheme – you must find one or contact an accountant or financial advisor for help. It’s a good idea to start looking at least six months before your deadline – or staging date – as many schemes can take a while to set up.
How much should I contribute?
Recent changes to auto enrolment meant that minimum contributions for employers rose to 3% earlier this year – for small businesses this makes it difficult to see it as anything other than a burden. These are minimum contribution levels – you can pay more into a pension fund if you wish. There are a number of reasons why offering a generous workplace pension can be of an advantage to SMEs – offering a package can be a useful way of attracting and retaining staff. If you look after your employees, it can help them feel more secure knowing their employer is helping them prepare for their future.
What do I do next?
Are you aware of your ongoing duties? As an employer, this includes the requirement to re-enroll every three years. This is when all staff, including those who either previously opted out of their workplace pension scheme or who did not meet the requirements to be enrolled, need to be reassessed to see if they now meet the criteria. Employers will need to write to staff to advise them what has been done, and they’ll also need to re-declare their compliance to The Pensions Regulator.
We offer fully compliant auto enrolment services to help support you and your business through successful implementation and ongoing compliance. View further information on the auto enrolment process.