Commissioned by Lane Clark and Peacock
The automatic enrolment legislation will require employers to automatically enrol their employees into a pension scheme that meets minimum quality requirements. In many cases, most or all employees will
be eligible. For the first time in the UK, employers will be legally required to contribute to a pension scheme in respect of automatically enrolled employees. Many employers may have a nasty surprise in store in the
shape of increased pensions costs and an increased administration burden. There will be much for employers (and, in many cases, pension scheme trustees) to do, so early consideration of the issues is vital.
Here are some of the questions you should be asking yourself now:
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Do your existing schemes meet the minimum quality requirements? If not, what changes are required and what are the associated costs?
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Are you sure you have considered all your subsidiaries and categories of worker?
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What are your objectives regarding pension provision? Possible objectives might include, for example, providing market-leading pension arrangements, or minimising the administration required, or minimising cost, or targeting median benefits for your industry/location.
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Will you use an existing scheme to auto-enrol employees, or will you set up a new arrangement?
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Have you considered, and budgeted for, the increase in expected pension costs?
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What systems will you use to comply with the administration requirements of auto-enrolment? Who will keep the necessary records?
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Is consultation with employees required if you are planning changes to pension benefits?
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Who is responsible for the planning and implementation of the auto-enrolment requirements?
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What employee communications will need to change? (eg contracts of employment, job offer letters, as well as pension information)
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