Auto Enrolment (AE) – Work Based Pensions For SME’S

 

An opportunity, threat or headache…….?

New Government legislation that came into force from October 2012 requires employers to automatically assess and enrol their employees who are eligible to join a workplace pension by their staging date, which is the point at which a pension scheme and pension contributions are due from.

This is now proving to be a fast approaching reality for many SME’s with over 50 staff, with staging dates from January 2014 and beyond. Within the industry, there are very real and legitimate fears and concerns that pension providers do not have the capacity to assist smaller SME’s in the UK due to their number of employees or minimum annual pension contribution limits.  This combined with the unknown business cost and risk, employment ramifications and fines for not meeting the 257 employer duties brings home the importance of having access to professional advice and pro active forward business planning.

Regardless of a company's chosen provider route, the Pensions Regulator (TPR) recommends seeking professional advice and allowing 12 – 18 months planning due to market factors.

This means that some employers who plan late face the risk that they will not have adequate time to meet their obligations nor arrange the most cost effective of preferred scheme in place and/or may have to consider joining the government based National Employment Savings Trust (NEST).

The above is particularly important for SME’s, many of which simply do not have the requisite HR & IT support required to address the myriad of requirements the new legislation brings. Many fail to appreciate the employment law and financial planning implications of Auto-Enrolment, which will undoubtedly require amendments to be made to employee’s contracts of employment.

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At Holden Solicitors we believe it is vital that a business obtains independent, holistic appropriate legal and financial advice and support to enable it to properly implement these major new changes. We are happy to arrange a free initial consultation with any business to discuss the legal impact upon them, how that is best dealt with, and the mechanics required to allow for a seamless move forward.


We work closely with Leigh Astin of Chase de Vere Independent Financial Advisers, who are experienced pension advisers and can provide companies with the necessary AE support.