Partner Article

‘Don’t ignore Auto Enrolment’ , warns Haworths

Changes to the rules on annuities may be stealing all the pensions headlines but too many Lancashire companies are putting themselves at risk of fines by ignoring their auto enrolment staging date or simply failing to be ready on time.

That’s the stark warning from Accrington-based chartered accountancy firm, Haworths, which points to the 166 penalty notices handed down in Q4 of 2014 as evidence of the urgent need to ensure compliance.

Explains director of Haworths, Mark Schofield: “The process of auto enrolling employees in company pension schemes began with larger companies back in July 2012 so the changes and challenges that accompany implementation of Workplace Pensions legislation have dropped from the news agenda.

“However, this year will see many SMEs reach their staging date and, unfortunately, too many of these have failed to prepare in time and found themselves struggling to introduce the required changes to their business within the time frame they have been given.”

By 2018, even the smallest companies will be obliged to establish a Workplace Pension scheme for their business and enrol all eligible employees that have not chosen to opt out.

Haworths warns that implementing the changes in time for a staging date can take months as it involves identifying a pension provider and setting up the scheme, consulting with employees and integrating varied business processes, including payroll, so that contributions can automatically be taken from both the employee and the employer.

“The legislation is designed to be beneficial for the employee and flexible enough to enable the employer to select the least onerous route to fulfilling its obligations,” continues Mark Schofield.

“However, if SMEs leave it too late to put a Workplace Pension in place or do so without professional advice, they could find themselves in receipt of a warning or a fine.”

The Pensions Regulator issued 1,139 warnings during Q4 of 2014, indicating the scale of the problem.

“We understand that identifying and implementing a Workplace Pension scheme is a significant burden for many SMEs, many of whom are still recovering from the recession and have no experience of pensions.

“That’s why it’s important to plan ahead and work with finance professionals that can help reduce the impact of your staging date and ensure you avoid a fine.”

This was posted in Bdaily's Members' News section by Haworths Chartered Accountants .