9 out of 10 companies, that have already implemented Auto Enrolment, admit they misunderstood the length of time it would take to implement the scheme. Serving as a warning to others, the general consensus amongst these companies is that Auto Enrolment is complex and detailed legislation which requires in depth understanding and time to prepare for it.
What is Auto Enrolment?
Auto Enrolment is new pension’s legislation which requires all UK companies to enrol all eligible employees into a qualifying pension scheme. Auto Enrolment was introduced by the government following research that identified millions of British workers are not saving sufficiently for retirement.
Understanding Auto Enrolment
Start date - Each UK company has been given a start date, known as the Auto Enrolment staging date which has been determined by the number of employees on the PAYE on the 1st April 2012. Knowing this date should allow companies time to prepare and ensure they are complying with what’s required by the legislation.
Assessment of workforce- Companies must begin the Auto Enrolment process by assessing their employees’ eligibility across six different categories. Written communication must be issued to inform employees of their category, with eligible employees being advised they have been enrolled in a scheme.
Register a qualifying scheme- Companies need to select a Pension Scheme is compliant and register with The Pensions Regulator to ensure they meet all requirements.
Administer an ‘Opt-out’ scheme- An Opt-out’ scheme must be administered to allow employees to opt-out of the scheme. Every 3 years each employee must be re-enrolled into a pension and the process with opt-outs must be repeated.
John Hinckley, Accounts Product Manager from DMC Software Solutions says ‘Given the feedback from companies who have already staged Auto Enrolment, it is clear that those businesses that haven't yet begun planning need to act now. The latest Payroll solution from Sage, Sage 50 Payroll 2014 (The Auto Enrolment Edition), ensures each step of the process is managed efficiently and reduces the labour intensive administration required.’
About Sage 50 Payroll 2014 (The Auto Enrolment Edition)
The new Sage 50 Payroll solution has been designed to help companies be fully compliant with Auto Enrolment legislation. Sage 50 Payroll 2014 includes a Pensions Centre which has everything needed to administer Auto Enrolment from start to finish. Users can benefit from an in-built personalised Action Plan based on The Pensions Regulator’s best practice and Sage Research.
A Pensions Module is also offered as an optional paid for feature in Sage 50 Payroll 2014. The Pensions Module automates the process of administering Auto Enrolment and removes the time consuming manual processing involved.