I am confident by now that just about everybody is aware that workplace pensions are coming to every employer before the end of 2017. There is even a shiny new government advert on the TV that shows a huge fluffy monster that is trying not to be overlooked.
I have already written to each client with their staging date and what needs doing by when.
However, it is a sad fact of life in our modern world that whenever something is forced upon every business by our beloved government there is a gift-wrapped opportunity for scammers and chancers to try and frighten people into parting with money. Sometimes huge amounts of money.
Today, a client had a phone call from “The Workplace Pension People” asking probing questions by a well trained interviewer trying hard, with a polished script, to bluff information from which he could start to pressure my client into believing that he had more action to take and more money to spend – to make sure he was compliant. After all, the penalties for getting auto-enrolment wrong are punitive and out of all proportion to the “crime” of missing a deadline for something.
So, the point of this post is to settle any worries that may be out there about auto-enrolment and an employer’s responsibilities in the run up to their staging date and beyond.
Despite what you may read to the contrary in the press and on the internet, auto-enrolment is actually really simple to comply with and not expensive to set-up and manage.
For example, if we are already running your payroll – you are compliant with most of the rules already. We will produce the letters needed and run the assessments automatically each time the payroll is run. If any worker starts or changes their status – it is already dealt with as the payroll is run. It doesn’t cost any extra and it doesn’t delay any calculations. We keep the audit trail of your weekly/monthly assessments and are happy to show these to the Pension Regulator at any time.
All you have to do is choose an Auto-Enrolment pension scheme. You can talk to an IFA (Financial Advisor) and pay loads of money to have a bespoke scheme set up for your company – but you don’t have to do this. The government schemes such as NEST and NOW will set you up a scheme for free in a few minutes. You do need to set up a scheme if you are an employer in order to comply with the regulations but why would you want to spend money if you don’t need to? Especially if it looks as if you are never likely to use it.
So, if you get a phone call like the one described – it will be either a con to sell you a scheme you don’t need to pay anything for – or a simple scam to get you to part with some money for “consulting visits” to advise you that you are already compliant. You can safely, and politely if you want, tell them you don’t need their kind offer of assistance.
There was some confusion in the early days that a pension scheme for Auto-Enrolment could be a multi-functional thing for a sole trader/partnership/limited company to satisfy all requirements for government auto-enrolment and also be useful for other purposes such as a personal pension for directors and proprietors. The simple fact is that an Auto-Enrolment scheme stands on its own. You can set up other pension schemes for the company directors to help with corporation tax or a sole trader personal pension but you cannot combine these schemes with an Auto-Enrolment scheme. It is because of the tax position and tax treatment of contributions.
I am happy to set up a scheme with one of the government suppliers if you let me know which one you are interested in. Recent experiences with NOW have impressed me but I expect NEST and Peoples Pension will be just as good, helpful and slick to use. You can use your own intelligence and research to choose one of these – you don’t need an IFA and you will not be fined or otherwise black marked if you choose not to – despite what you may hear to the contrary.
If you are still not sure of your staging date please get in touch ASAP. It only takes a moment to see and get you on the road to compliance – for free.