You may have already received notification from the Pensions Regulator confirming your staging date for the commencement of Auto Enrolment Pensions in your business. If you haven’t received one yet then it really is only a matter of time.
Apart from the fact that it will be a legal obligation to provide a workplace pension provision for your employees, another factor has emerged to encourage quick decisive action. Pension providers are imposing commercial terms for their schemes, which may exclude both you and your staff, largely due to capacity issues and legislative reduced charges.
Major companies such as Aegon, Aviva and Standard Life are applying a minimum average monthly contribution, a minimum number of scheme members and possible service charges as filters for new business. The actual figures vary by provider but figures of around £100-£150 per month minimum contribution are common criteria.
This news does not mean that you won’t be able to offer Auto Enrolment Pensions (nor does it mean you can get out of providing a scheme). The default option, NEST (National Employment Savings Trust), has been created by the government specifically for auto-enrolment and designed with the needs of lower wage earners in mind.
NEST has a statutory obligation to accept all employees irrespective of contribution levels. On the downside NEST has been met with a level of scepticism with respect to its investment choice and potential future costs.
Fundamentally this is an issue of choice and if you want to have some decision about who manages your pension scheme then you should start the enrolment process NOW.
In order to manage client expectations and maintain our level of service, we would appreciate you giving some serious consideration to this matter and contacting us accordingly.
If you need advice on how to manage the impact of Auto Enrolment Pensions on your business then contact Lewis Smith & Co. today. We have an in-house team of accounts, tax and payroll experts plus a network of trusted advisers on a range of financial services.