placed to assist an employer to choose the right scheme for them. They may also provide services to employers on an on-going basis to help with the admin of automatic enrolment.’
Employer don’ts: As well as sharing the experience on what to do, NEST employers have highlighted what you shouldn’t do. Staged employers warn: ‘Don’t fall for these misconceptions…’ ‘Once we’ve chosen the pension provider everything will be done for us’ ‘There’ll be a lot of work leading up to the deadline but then our work is done’ ‘We have to offer a pension to all staff’ ‘It’s like the stakeholder pensions. Most people will opt out’ ‘Our payroll provider will tell us what we need to do with regards payroll’ ‘Once we’ve chosen the pension provider everything will be done for us’ Pension providers aren’t going to be able to do everything. Employers tell us that the main challenges they face are understanding how the regulations apply to them, assessing which workers are eligible and communicating the changes to their workers. Not all providers are ready you help you with these. Providers can make it easier though; at NEST, for example, we’ve put together a range of guides and tools to help employers understand what they’ll need to do to get ready. ‘There’ll be a lot of work leading up to the deadline but then our work is done’ Automatic enrolment isn’t just a one-time event. Once you’re up and running you’ll still have to calculate and pay regular contributions and keep assessing your workforce for anyone that needs to be automatically enrolled every pay period. ‘We have to offer a pension to all staff’ Automatic enrolment doesn’t apply to everyone. Employers need to automatically enrol all workers who: work or usually work in the UK aren’t already a member of a workplace pension scheme are aged at least 22 but under State Pension age earn more than £9,440 - this figure applies to the 2013/14 tax year, and is reviewed each year by the government. ‘It’s like the stakeholder pensions. Most people will opt out’ ‘At the beginning of automatic enrolment the industry assumed an opt-out rate of around 35 per cent, experience so far is that they are much lower – typically lower than 10 per cent. This is a great success story for workers, with more workers saving for their retirement than anticipated’. ‘Our payroll software or service provider will tell us what we need to do with regards payroll’ ‘Your payroll software might not be able to do everything for you. It might assess the eligibility of your workforce but it won’t be able to tell you what your pension rules are, in fact you must tell it what the rules are. The only way you will know what your payroll service provider will do is by asking them – don’t just assume! They might run the payroll processes but they might not carry out all the work necessary for you to meet your automatic enrolment obligations.’ Karen Thomson, CIPP. These people are known as ‘eligible jobholders’ and their employers will also have to make a minimum contribution into the pension scheme on their behalf.
CIPP Policy News Journal
16/04/2014, Page 460 of 519
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