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Auto Enrolment – is it ‘nothing, something or everything?’

Auto Enrolment has been heavily discussed for a number of years. There have been a number of TV campaigns raising awareness and imploring individuals not to ignore it and yet despite this, there is still much confusion.

Auto Enrolment is steeped in regulation, obligations and statute and is supported by a proactive regulator which frequently writes out to companies warning them of their duties and yet there is a lack of understanding as to who it applies to and what they have to do.

The confusion seemingly surrounds both ‘who’ and ‘what’ however in simple terms, the ‘who’ is ‘any business who has workers’ but even those with no employees still have things to attend to.

The ‘what’, however, is where the real confusion lies ….. given that it may be either nothing, something or everything!

Which of these will depend on the structure of the business and the age and/or earnings of the workforce.

Even if a business is exempt and has to do nothing, they still have to report to the regulator they have to do nothing (therefore in reality, those who have to do nothing still have to do something – albeit it’s a one off notification)!

For those that have to do everything, this involves (briefly!) setting up a pension scheme, assessing their workforce, enrolling those who are eligible automatically into a pension scheme, communicating with their workforce (perhaps twice!), telling the regulator they’ve done this and then continually assessing their workforce and dealing with leavers/joiners/opt in and opt outs (amongst other things) over the coming years.

These duties therefore generally need to become ingrained in their business processes.

For those who have to do something, they may find that the only thing they don’t need to do is set a pension scheme up – pretty much everything else still applies.

In practice, therefore, Companies may think that because they only have a couple of employees who earn below the Automatic Enrolment threshold of £10,000 per annum they don’t have to do anything.  In fact, they are subject to precisely the same regulation and duties as companies who have employees earning above this threshold and therefore doing nothing is not an option.

Once their start date is reached, the Regulator will be waiting to receive confirmation as to what they have done.

Doing something is therefore their only option.

As we are now dealing with smaller businesses we are finding that many misconceptions are held which means that companies are in danger of doing too little too late – perhaps even missing their start date.

Our guidance is clear – if you think it doesn’t apply, check with someone who knows – in a 5 minute phone call we can quickly sort companies into the ‘nothing, something and everything’ categories so that, rather than being blissfully unaware, they are in an informed position ready to face the regulation about to apply to them.

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The risk of last minute ‘Auto-Enrolment’ shopping!

Many of us will have left the Christmas shopping a little too late – perhaps resulting in a quick dash to the shops or supermarket which results in us sitting gridlocked in a car park, stressed in the aisles, not having the choice we want and pulling our hair out at the checkout before getting in to the ‘after sales’ gridlock of that car park again.

Just like we all know when Christmas Day falls, we can also check when a firm will need to have satisfied its obligations with regard to Auto-Enrolment (AE). Just like Christmas, AE will take time to plan which is why The Pension Regulator (TPR) initially issues a ‘wake up’ letter to businesses 12 months before a firm has to have everything in place.

All companies can easily establish the date they need to have satisfied their obligations – something determined by either their size (if over 30 employees in April 2012) or their payroll reference number (if smaller).

For companies falling into the latter category, they will need to have everything in place at some point between June 2015 and April 2017 and whilst these dates creep ever nearer, the number of employers needing to tackle this begins to increase significantly

If you don’t already know, get your AE shopping list ready – your payroll reference number(s) in other words – and visit TPR’s calculator at

In tax year 2014/15 there were approximately 32,000 employers required to meet the new legislation and this number rises to just over 150,000 in 2015/16 before the risk of ‘queues at the checkouts’ gets much worse with over 610,000 firms in 2016/17 and a further 530,000 in 2017/18.

We are already hearing about ‘capacity issues’ with some providers and the expectation is that those seeking advice from firms such as ours may also find themselves at the back of an ever lengthening queue as reality takes hold and the last minute panic buying takes hold.

But fear not; to beat the rush and to shop with leisure, companies may well wish to begin to plan ahead and do much of the hard work now and then sit back and watch as others live to regret not heeding our words of warning….