Posted by

Lynn Graves, Head of Business Development, Scottish Widows

03 Feb 2015

It’s been two years since the introduction of auto enrolment and the time is fast approaching for smaller businesses to stage. The benefit of a later staging date is learning from the experience of pension providers and larger organisations who’ve paved the way.

One of the most common pitfalls when it comes to auto enrolment is not being adequately prepared. Whether it’s lack of awareness of legal responsibilities or not cleansing HR data, the biggest indicator of success is whether enough preparation has been put in.

First and foremost, know your staging date and what you need to do by then. It may seem a little obvious but this really is the starting point, having this information enables you to form a plan. You can find out your staging date by registering with The Pensions Regulator.

Once you know what needs to be done, try to commit as much resource to auto enrolment as budgets will allow and provide the regulator with a point of contact in your business. There’s plenty to do in preparation so having enough in-house support will help.

You may want to consider paying for extra support from a Financial Advisor. They are likely to have helped other businesses through auto enrolment before so you can benefit from their experience.

Pension providers are well experienced with auto enrolment also and may give you guidance and support for free or for a nominal fee. Alternatively you can utilise the free online resources provided by the pensions regulator.

Much of the auto enrolment process is dependent on technology so consider your options thoroughly. Payroll software can help you track ages and earnings of all your employees and may prompt you when you need to take action. If you already have payroll software it may already have the functionality, or if a third party provider manages your payroll you need check the software supports auto enrolment well in advance of your staging date.

If you find that your payroll software won’t support auto enrolment, some pension providers offer middleware which can help with worker assessment and generate files to submit to their back office systems, or there are standalone platforms available, but again you need to check its compatibility.

Data has also proven to be a stumbling block for some companies who’ve staged already. I can’t stress enough how important it is to cleanse your HR data and make sure you capture the essentials. It can cause delays in being processed by your pension provider, or the formatting might not be compatible with your middleware if you’re using one. The worst-case scenario could be having missing or inaccurate data, which may have a knock on effect with your compliance resulting in a hefty fine or even court action.

My top tips are:

  • Know what you need to do and by when
  • Dedicate as much resource as you can
  • Consider what support and advice you use
  • Make sure your technology supports auto enrolment
  • Cleanse your data

All views expressed in guest blogs are that of the authors, and not of the British Chambers of Commerce