NEW rules on company pension schemes, originally given broad approval a couple of years ago, have recently been rubber-stamped by the Coalition Government.

The roll-out of the auto-enrolment requirement for employers will begin in 2012, with those representing 120,000 people being first to face the regulation.

As time progresses, greater numbers of employers with lower staffing levels will find themselves falling into the catchment for auto-enrolment.

For example, those with 800 staff will qualify from October 1, 2013. This all seems a long way off for the vast majority of firms, but now is the time to start forward planning.

One of the main reasons for this is long-term tendering. Without planning ahead and taking such personnel costs into account, how can you properly price a tender for a contract that will run past the date when auto-enrolment becomes applicable?

It would be an unwise person, indeed, who lands their company with a major contract on the back of best price and tight margins, but does not consider a major cost increase that has been highlighted so far in advance.

Let us not forget that auto-enrolment is a complete turnaround on the current system. No longer will it be the case that an employer simply has to make access to a pension scheme available should it be requested, but entry to the programme is compulsory unless an individual opts out.

Coercing existing or new staff to opt out, or employing those who do not wish to take part in advance of those who do, is not allowed and a practice upon which the Government will come down hard.

Likewise, although this will be harder to regulate, there will be an expectation that those companies which are already contributing to pensions do not reduce their payments to the minimum 1% simply because they have more people enrolled.

Most companies we deal with in the construction and civil engineering sector, and as industry specialists we deal with a lot, are already very good at offering what is required. The trick will be to make sure none get caught out when the requirements change.

This is an additional cost – yes, another one – which will hit the already stretched companies that comprise the construction sector. There isn’t a way of avoiding this additional cost, so the key is to plan ahead.

A seminar helping construction and civil engineering businesses understand and prepare for the new legislation is being hosted by B&CE Benefit Schemes and will take place at the Marriott Hotel, Gosforth Park, on Friday, February 18. For more information, contact Constructing Excellence in the North East on 0191-3740233.

For more information on Constructing Excellence in the North East, please contact chief executive, Catriona Lingwood, on 0191-3740233 or catriona@cene.org.uk .

Steven Ord is key relationship manager, B & CE Benefit Schemes.