Shipleys LLP

Chartered Accountants and Professional Business Advisers

Auto Enrolment

Rules are being introduced which require employers to enrol eligible employees into a pension scheme and make contributions. Employers are affected in size order, with larger employers already required to have implemented their schemes. There are substantial penalties for those who fail to comply. Some employers are treating auto enrolment as an opportunity to fully review their pension arrangements whilst others simply wish to comply.

This note sets out the key stages of the implementation process for most employers. Please speak to your usual contact at Shipleys for further guidance on where to get help.

StepActionWhen to actOptions
1Know your staging dateNowAsk your payroll provider or go to the Pensions Regulator Website.
2Inform The Pensions Regulator of your business’ “point of contact” for the schemeSix months before your staging dateYou need to provide a primary contact. The point of contact is normally a senior member of the business. If Shipleys is your payroll provider we recommend adding us as a secondary contact.
3Appoint a third party advisor to assist you through the processSix months before your staging dateThe business needs to speak to a financial advisor to decide the best type of scheme for the business and employees. The options range from a basic compliance scheme to a bespoke scheme to achieve specific objectives. This can be done by the business itself direct.
4Collate all employee dataThree months before your staging dateThis can be done by the business itself with assistance, if necessary, from your payroll provider.
5Third party advisor to appraise and recommend a pension providerThree months before your staging dateThis can be done by the business itself direct. If appropriate, we have financial advisors that we recommend and have negotiated fixed pricing with for basic advice to the employer and an introduction of the appropriate scheme to the employees.
6Communicate to all staff pre-staging and provide a detailed packa) Communicate three months before staging date; b) Send packs on staginga) This can be done by the business itself direct or by the third party financial advisor; b) This is provided by the pensions provider.
7Review payroll individuals classifying them as eligible, non-eligible & entitled workersOne month prior to staging dateThis can be done by the business itself or your payroll provider.
8Auto enrol your workforceAt staging dateThis can be done by the business itself or your payroll provider.
9Complete your declaration of compliance to The Pensions RegulatorFive months post-staging dateThis can be done by the business itself direct, the payroll provider or the pension provider.

Please note

  1. This is a simplified step overview for the most basic compliance.
  2. The responsibility for auto enrolment is the employers'. You can outsource part or all of the process but the employer will be fined if the business does not comply.
  3. If Shipleys is your payroll provider we will be contacting you to discuss the additional payroll cost to cover the additional work for auto enrolment. The cost will depend on who your pension provider is. If you opt for the basic solution this, on average, will increase your payroll costs by 20% on your existing costs.
  4. We have negotiated a rate of £750 plus VAT as a one-off cost to use the services of a financial advisor who will review the business’ pension needs. The options range from a basic compliance scheme to a bespoke scheme to achieve specific objectives.

Specific advice should be obtained before taking action, or refraining from taking action, in relation to the above.

Need more help? Please contact us at advice@shipleys.com or +44 (0)20 7312 0000