IN a little over 12 months’ time, the country’s largest employers will be the first to meet their responsibilities under the new Workplace Pensions Reform.
The realisation that there is no “do nothing option” is beginning to hit home, and most large employers are probably aware of their staging date and the potential cost implications.
If you take a look at the nine detailed guidance documents on The Pensions Regulator (TPR) website, you will quickly realise that this isn’t just a pensions issue.
The regulator provides detailed instructions as to what procedures must be followed and, more importantly, what records must be kept.
This is not just about pension implementation, it is also about risk management as the expectation is this will be rigorously enforced by TPR and the potential financial penalties for non-compliance will be considerable.
The part of technology in making the process efficient and streamlined cannot be underestimated. The challenge is to provide a ‘scalable’ solution that can define the different categories of “worker”, provide each group with the correct level of information and where applicable, deduct correct contributions and pay them to an appropriate scheme whilst ensuring a robust audit trail is created.
RSM Tenon has launched its own technology solution, 4Pensions, to help employers manage the process of auto-enrolment.
4Pensions is a secure, online software package which guides employees through the process of joining a pension scheme and provides employers with a system to comply with HMRC and scheme governance requirements.
However, the RSM Tenon Business Barometer, a quarterly survey of senior management in small and medium sized enterprises, recently found that small to medium sized UK businesses are far from prepared for the changes in pension law.
The research, carried out by YouGov, found that almost half of all UK business owners were unaware of NEST and its implications on their businesses, while three-quarters of those that were aware of the scheme believe that it will increase payroll costs post 2015.
David Hodgson, Associate Director for Financial Management team, said: “This lack of awareness could lead to businesses failing to plan for the additional financial and administrative burden that this new legislation will have on payroll costs and systems for businesses post 2012.
“Advance planning and budgeting is crucial, and employers must ensure that they are ready for auto-enrolment, and more importantly, that Governance, Risk and Compliance processes are robust.”
For more information please contact David Hodgson on 07921 840 023