Planning for Auto Enrolment…
As the old adage goes 'poor planning leads to poor performance' and in our experience this applies to the planning and then rolling out an of Auto Enrolment programme. Here are 5 key steps to help ensure a successful roll out:
- Know your companies staging date
- Inform the companies decision makers to ensure that the necessary budget and support is given to the change
2. Plan for the change
- Assess your company's current pension provision against the auto-enrolment requirements for new and existing members
- Plan the change and communication program (key dates, milestones, tasks, resources, etc.)
3. Review the impact to the company's current pension arrangements
- Review the current scheme rules against the auto-enrolment requirements to ensure it qualifies
- Review the current administration process for joiners, leavers and ongoing contributions
- Ensure that a default investment option is identified and appropriate. Mercer's recent DC survey revealed that 79% of schemes have more than 75% of members in their default investment fund. Ensuring this fund is appropriate for the scheme's members is therefore essential. The default fund guidance issued by the Department of Work and Pensions will provide some assistance here.
- It's advisable to review the retirement process and adherence to discrimination legislation at the same time
(Follow this link to a online calculator that determines the cost your company for auto-enrolment: http://www.thomsons.com/aecalculator)
4. Mobilise an auto enrolment implementation team
- Compile a team that is responsible for managing the project who understand the legislation and timeframes
- Review the current situation against the requirements and propose a plan on making the necessary changes and communicating them effectively with all the stakeholders
- Link with trustees (where appropriate) and financial advisors to support the company through the process
5. Manage the change
- The responsible team compiles the communication plan and material
- Manages the communication and implementation process
- Manages any queries or issues that are raised throughout the process
- Review the effectiveness of the project post the implementation date
Employers may consider implementing a salary sacrifice scheme for pensions as part of the overall auto-enrolment pension's implementation.
Benchmarking that XpertHR published last year shows how popular salary sacrifice schemes are and that pensions comes second to childcare vouchers as a most commonly offered benefit. Overall, 63.2% of employers make use of salary sacrifice in some way; a further 2.7% are in the process of introducing salary-sacrifice benefits and 4.1% are considering doing so.
So, if your organisation would like to see how best to manage pensions auto-enrolment, then call the auto enrolement experts at Tugela People.