Many of the country’s small employers approaching their pensions auto-enrolment staging dates are in danger of missing deadlines, warns Lighthouse Group, one of the UK’s leading financial advisers.
Tens of thousands of pharmaceutical SMEs and micro employers are now starting to grapple with the complexities of employer pension schemes for the first time. The Pensions Regulator recently stated that only 29 per cent of those staging in 2016 were fully aware of their date, while only 46 per cent staging in 2017 were aware of their responsibilities.
Pensions expert Roger Sanders, OBE, cautions business owners to familiarise themselves with the requirements, and assess their business as soon as possible, even if their staging date is two years away.
Roger, Managing Director of Lighthouse Group Employee Benefit, comments: “Employers’ auto-enrolment duties go far beyond setting up a pension scheme and enrolling staff in it. They must assess their workforce, work out who to enrol and decide how much they and their employees will contribute. They also need to keep records of all this information, together with any changes, all of which represents a significant amount of work for smaller employers.
“However, we are finding many businesses in pharmacy lack the accurate, up-to-date information on employees vital to completing enrolment smoothly. Firms that leave their enrolment preparation too late will be in for a shock when they discover years of payroll and employee data needs to be sorted before they can properly begin.”
Lighthouse advises that employers who use a payroll bureau should ask whether their systems and software are geared up to deal with auto-enrolment, assessing if they can extract needed information easily, in a suitable format, and on a regular basis.
A payroll bureau generally holds information such as an employee’s full name, salary/wages and National Insurance number, but may not have the employee’s address and other contact details such as email – which is often held by the employer. However, under auto-enrolment all this information needs to be brought together each time an employee is paid, whether monthly, fortnightly or weekly.
SMEs should begin the process at least six months before their staging date, starting with checking what data their payroll function holds and how to export it, as well as what information is missing and must be tracked down. At three months before the staging date, businesses must have a process to collate all the information needed in a suitable format and on a timely basis. Data must be in a standardised format and should cover all employees, even if they will not be enrolled automatically.