Things to think about
The rules are now in place and there are a number of issues you will need to consider to practically implement the regulations. The following section may help you consider the changes, the impacts and how you might respond.
Some likely options are:
- Maintain a plan which would currently pass new quality tests.
- Upgrade an existing plan which would not presently pass the quality tests.
- Introduce a new automatic enrolment plan.
You could also consider a 'hybrid approach' where different product solutions are used for different groups of members.
The choice of solution(s) will depend upon factors such as:
- The profile of member groups.
- Needs of members.
- Recruitment and staff retention strategy.
- Our acceptance of your request.
- The new definition of qualifying earnings may potentially mean that your current definition of pensionable pay may change.
You may decide that a certification approach would be more appropriate.
- If current contribution levels are increased, this may have a significant financial impact depending upon the size of your payroll.
- This may be the first time you have needed to consider paying contributions for all eligible jobholders - this may mean the payroll upon which to base contributions will be much larger than at present and you will need to recognise the financial impact of this.
- Consider the percentage of members either opting-out or leaving.
By default all members' contributions will be passed to this arrangement, therefore care should be taken to ensure it is suited to the profile of eligible jobholders within your organisation.
Consider the following questions when choosing your default arrangement:
- What is the typical attitude to investment risk of our eligible jobholders?
- What are eligible jobholders' expectations for investment performance?
- What is the typical capacity for investment loss of our eligible jobholders?
- What is the typical period of investment?
- Will the default arrangement we choose be charge cap complaint?
- You will need to provide information via The Pensions Regulator's new online portal to confirm that you have met your obligations within five months of the staging date and follow the re-enrolment process. Find out more.
- You will also need to maintain records of the plans used to meet the obligation, details of the automatically enrolled eligible jobholders (including those who have opted out) and voluntary joiners.
- Ensure that you have a reliable and secure method of holding this information with reporting functionality. Ensure this is in keeping with current data protection regulations.
- The responsibility for this may be within a Human Resources department although it is likely to be shared with a department handling payroll. Remember, however, it is the employer's ultimate responsibility.
- Consider the profile of your eligible jobholders and choose the most appropriate communication method.
- Check for awareness and understanding.
Help from The Pensions Regulator
Introducing automatic enrolment needs careful consideration and planning. Here are the key steps you might need to follow:
Know when you need to be ready - be sure of your staging date
Provide a point of contact
Develop your initial plans
|This is the date you need to start enrolling your jobholders. The Pensions Regulator will inform you of this. You can find out your staging date by entering your PAYE reference for your largest payroll into the staging date tool on The Pensions Regulator's website.||
To receive ongoing help, register on The Pensions Regulator's website for update emails. Also, provide a point of contact to ensure information goes to the right person within your organisation.
You will need to start planning well in advance of your staging date. Visit The Pensions Regulator's website - you may find their automatic enrolment planner useful.
Make an enquiry using our secure online mailing system.