From the 1st October 2017, if you employ someone you will become responsible for ensuring they are auto-enrolled on the pension scheme on their first day of work. For those you already employ, this duty will come in to effect at the start of 2018. Check here to see exactly when.

All employers must go through auto-enrolment, whether they employ one member of staff or 1000, this means that all eligible staff must be put into a pension scheme that you contribute to. This is a legal requirement which can lead to fines if ignored.  To work out what your responsibilities are use the Pension Regulator’s duty checker. It can be daunting for the SME business owner to understand what is required of them and what they need to do to meet this requirement, but help is at hand.

Research by the Government-backed pension scheme NEST indicates that the majority of SME businesses support the scheme, with 86% of responds saying they think it’s a good idea. So what do you need to know, and what help is available?

The best policy is to plan ahead and ensure that you know exactly what you need to do. If it’s not a new starter, then find out your staging date using the link above. Then choose your pension scheme. Find a list of providers that work with small businesses and do a bit of research to see which offer the right service for you, at the best price. NEST is obligated to work with all businesses, but they are not the only option out there. The Pension Regulator site has a handy list of “master trusts” that are open to businesses of all sizes and have been independently reviewed.

If you are a member of the FMB, you can benefit from our partnership with B&CE which will give you full access to the People’s Pension, a full support auto-enrolment solution for small firms. You will also have the opportunity to sign up directly with the People’s Pension for only £300 (normally £500). There is lots of information and resources in the members’ area of the FMB site, including information on your obligations and template letters for communicating information about auto-enrolment to your employees.

As a guide, everyone working in the UK who is over the age of 22 and earning more than £833 will be eligible for auto-enrolment. They will have the option to opt out after enrolment, and will receive their first month’s contribution back if they do so within the first month. 

Here are some top tips for SME businesses dealing with auto-enrolment for the first time.

  1. Make sure you know your staging date, and don’t avoid your responsibilities. Businesses are already being fined for failing to meet their requirements,
  2. Ask for help. There is plenty of information available online if you want to manage the process yourself as the Government is trying to make auto-enrolment as simple a process as possible. The FMB’s 24 hour business advice helpline can give you some advice should you need any, the phone number is in the members’ area of the website.
  3. Consider all your options. As well as finding a low cost solution, it is important you find the right one for you and your business. Look out for something that works well with your systems, is easy for you to run, has a positive benefit for your employees and can adapt with your business.
  4. Give your employees a better retirement. Support your employees well and you will find a happier workplace and better retention of staff leading you to greater profits.

Don’t be daunted by auto-enrolment. There is help out there, it should be a simple and positive process for the future of your business and employees.

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