Well “no” actually!
This article sets out to explain why even the youngest of companies should be planning for pensions.
Pension planning isn’t top of the list for entrepreneurs, most hope their business will become their pension. But there are good business reasons for those starting companies today to be interested in workplace pensions.
The phrase on the street’s “auto-enrolment”. It means paying money through payroll into a pension scheme you set up for your staff.
In case you missed the DWP’s ‘we’re all in’ campaign you can catch up with the Pension Regulator’s very clear and stark message for SME’s and their advisers, which is
‘Act now, it’s the law’.
So go and get a cup of tea, look up your company’s PAYE scheme reference and get ready to plan
Tip one; Let’s start with what’s called “staging” (a very good place to start)
The staging date is the date at which an employer’s legal duties for Auto Enrolment begin.
New employers from 1 April 2012 up to 30 September 2017 will have a staging date between 1 May 2017 and 1 February 2018 and for new employers going forward the staging date is based, not on number of employees, but on when the employer first processes a payment via PAYE.
Tip two; Press this link and find out when it’s your turn to go
The link takes you to the Pension Regulator’s website and its staging date calculator. There you can find the project planning tools to manage your journey
Tip three ; look at your business set up and ask yourself – “How will Auto- Enrolment impact your business?”
Q: There are a number of contribution options; how much will each option cost you?
Q: How will you integrate these costs into your business plan?
Q: How will you communicate the changes to your staff, shareholders and bankers – assuming you haven’t started already?
Q: How will you choose your workplace pension and record your decision for posterity
Tip four – work out whether the people who manage your payroll up to the job
Payroll is fundamental to the success of Auto Enrolment – your payroll software needs to adapt to be able to carry out the functions needed, such as regular assessments , the issuing of communications and the submission and reception of information from your pension company
Q: Do you need to change your payroll supplier?
Q: What process should you follow if you do?
Tip five – if your payroll operator is not interested in auto-enrolment, it’s time to talk to payroll experts who are. Press here to find a directory of accountants who are committed to ensure when it comes to auto-enrolment “no employer gets left behind”
Tip five; Choose your workplace pension now
Although your staging-date may be two or three years away, you can set up your workplace pension today and use it for your key staff before you stage.
Pressure on pension providers to establish pensions towards the end of the staging cycle (2016 onwards) is going to be huge. Setting up a workplace pension is a good idea (whether you have to or not).
This link takes you to a system which helps you select a pension and provide you with a report on how you made your selection.
Tip six; understand the key functions of auto-enrolment — assessment and communications
The rules of assessment are complicated and we recommend you understand how they work. They govern who you pay contributions for and what you have to pay. Getting these rules wrong can lead to harsh fines that start at £50 per day and can easily outstrip the statutory costs of auto-enrolment.
The key communication question is about the right to opt-out? Opt-out details must be dealt with by the pension scheme and regulations exists to protect the employee from employer coercion to opt-out.
Q: Who will carry out the assessment and how?
Q: Who will send out the communications and how?
Q: How will these decisions be communicated and by whom?
Tip seven; use auto-enrolment to your advantage
It does;t take long to get up to speed with auto-enrolment, if your follow the first six tips, you’ll be an authority for your staff and those you wish to hire in the years to come. By being ahead of the game you can show you are the kind of employer who is looking to the future.
One of the biggest problems for start-ups , is hiring staff who share your, the entrepreneur’s vision. All too often entrepreneurs are not too good in including their staff in that vision.
Even if you pay nothing into pensions till you have to stage later in the decade, making yourself an auto-enrolment expert today may be the smartest way to manage staff relations in town.
Q: How do you retain, maintain and build on your staff resource?
Q: How will you ensure your bring your staff with you on your journey?
The one constant is change, make sure you don’t get left behind.