Pension reforms – a five point action plan for employers
Although many employers have heard the new radio ads publicising the new pension rules they no idea what they’ll have to do to comply. The rules change (albeit for only the largest employers) from October.
Most employers will be hit by the new rules from 2014 onwards. Don’t sit back in your chair and put this in the “far too difficult” pile as, in some cases, this is less that 20 payroll dates.
The worrying thing is that The Pensions Regulator will police your compliance with these new duties. The Regulator can also issue substantial penalty notices to employers. If you fail to comply it could also amount to a criminal offence.
That’s enough of the doom and gloom. What can you do in a positive way to make sure The Pensions Regulator doesn’t come knocking on your door?
We’ve come up with a 5 point plan to help you survive the new rules. So – what do you need to do?
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Find out how your workforce will be affected – as well as your employees, you may also need to consider contractors, agency staff and non-executive directors.
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Find out your “staging date” and put a big red ring round this date on the calendar. This is when the new rules will apply to you.
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Work out what it’s all going to cost. This means not only the extra pension contributions you’ll have to make but also the internal costs of staff time, systems upgrades etc. Don’t worry there may be ways to reduce costs. We have a few tricks up our sleeve!
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Make sure someone “owns” the project– it won’t go away. You’ll need someone internally or externally to co-ordinate across several areas including HR, Benefits and Payroll.
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Decide whether to use an existing pension plan, a new one, or the government scheme which is called NEST.
That’s probably enough to be getting on with. Please don’t wait to the last minute to look at this as you may run out of time. If it’s going to cost you money you will need to factor this into your business plan over the next three to five years. You may also need to take this into account when looking at annual pay reviews for your employees this year and next.
We’re working with all our clients to make sure that they know what they have to do, the options and ways to reduce costs. If you’d like us to help you with your Pension Survival Plan please contact us here.
Steve Clark
Related articles
- New guidance on workplace pension reform (44financial.co.uk)
- Charities – the ticking pension time bomb (44financial.co.uk)
