You may have seen the “We’re All In” advertising campaign on TV and in newspapers. It relates to the new workplace pensions law known as automatic enrolment which all employers will have to comply with regardless of how many people they employ. The great news is that, as a result of the change in the law, since 2012 over five million workers are now saving (or saving more) for their retirement. Automatic enrolment applies to all employers from large organisations with thousands of employees, to micro businesses employing just one person. The law affected the largest employers first but we are now coming to the time when small and micro employers need to begin getting ready for when the changes will apply to them.
We’re working with colleagues at The Pensions Regulator to help them publicise the changes, as they want to reach as many employers and business advisers as possible. The best place to start looking for information if you haven’t done so already is the regulator’s website.
All employers now have legal duties to automatically enrol their staff - and nearly 44,000 larger employers have already done so. From June this year, tens of thousands of small and micro employers must do the same – and they need to start preparing for that now.
The Pensions Regulator will be writing to all small and micro employers over the coming months to ensure they know when their new workplace pension duties start. The letter will provide key information such as the date the law applies to them and the process through which they can provide a nominated contact to the regulator to receive regular, useful and relevant information in the run up to the date at which they need to comply with their duties.
Most employers will be using advisers
You may be thinking, what has this got to do with me? Well, in a recent employer survey The Pensions Regulator found that seven out of ten employers are planning on asking a business adviser for help with automatic enrolment. So it is vital for you to have the right information and tools to help your clients efficiently.
A similar survey amongst advisers showed that awareness and understanding of automatic enrolment was high among all adviser types, including accountants, independent financial advisers and bookkeepers - although there are still some knowledge gaps. The regulator’s website has a wealth of useful information, including:
- a staging date tool
- an automatic enrolment planning tool
- what to look for when choosing a pension scheme.
Advisers working together
We know that different types of advisers often find it useful to work together so they can offer clients a full end to end service that makes the best use of their professional strengths. Experienced independent financial advisers are skilled at providing advice to their clients on selecting a pension scheme, whilst other types of advisers are better placed to help with other tasks including assessing workers, identifying qualifying earnings, organising payroll and so on.
Start preparing now
The Pensions Regulator recommends employers start planning 12 months in advance of their automatic enrolment staging date. So we suggest you talk to your clients sooner rather than later to ensure they are taking steps to get ready, or know when they need to start. There is a really helpful planning tool on The Pensions Regulator’s website to help them get started. There are many excellent sources of information about automatic enrolment on the web. But you should always check the regulator’s website to ensure those sources are accurate.
Clients who risk non compliance
If your clients experience problems that could risk non-compliance – please encourage them to alert the regulator as soon as possible. Although the regulator will use its powers where needed, its priority is to educate and enable employers to meet their new duties.
Don’t forget if you employ any staff the law will also apply to you as an employer!