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AAB MONTHLYFEATURE OPINION | MARCH 2016

AAB Monthly opinion Auto Enrolment – delaying may be costly With regard to pensions and autoenrolment, you must have heard the phrase “we’re all in”. However, what many people have missed is the constant changing position of the pension providers themselves, meaning that they are not always “in” with employers. To date around 50,000 employers have passed their staging date and tried to fulfil their auto enrolment duties. In 2016, over 500,000 employers will have staged. This is a staggering number and although many companies will already have a suitable pension scheme in place, there is no doubt there will be enormous capacity pressures on pension providers this year. But why should employers be concerned about pension providers’ pressures? For employers, the concerns around pension selection will not only be the cost of the contributions which may be new to them, but in addition, many pension providers are starting to implement costs simply for providing a pension solution. This can be in the form of a fixed monthly fee, an annual amount or an initial set up charge. All of which add to the employer’s already heavy cost burden. The ability of an employer to deliver strong, positive employee engagement by providing a scheme which offers low pension charges, online capability and increased flexibility will largely be dictated by which pension provider they have secured to provide the product.

Employers are beginning to find that because of the capacity issues, many pension providers have strict parameters to determine the businesses they are willing to work with. Factors they consider include the annual contribution total as well as the age demographic of the staff. One of the largest UK pension providers will implement no more than 10,000 new pension schemes in 2016. This gives an indication of the reduced choice smaller employers will have when it comes to selecting a quality pension scheme for their employees.

by Richard Petrie, Integrated Employment Solutions Manager at Anderson Anderson & Brown LLP

Furthermore, latest figures issued by The Pensions Regulator suggest more and more SME’s are starting to fall foul of the legislation. Half of all compliance notices, that have been issued since auto enrolment began in 2012, were generated in the final quarter of 2015. In addition over 1,000 fixed penalty notices were issued in this relatively short period. For any employer still to go through auto enrolment the message is clear: 1. Act sooner rather than later to help secure a quality pension solution; and 2. Don’t ignore your duties as this could prove even more costly. If you think your business would benefit from a free no-obligation meeting or phone call to discuss auto enrolement, or indeed any other employee benefits, please get in touch by emailing richard.petrie@aab.uk.

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March Business Bulletin  

In the March Business Bulletin we focus on global markets. The Business Bulletin is Aberdeen & Grampian Chamber of Commerce's monthly magazi...

March Business Bulletin  

In the March Business Bulletin we focus on global markets. The Business Bulletin is Aberdeen & Grampian Chamber of Commerce's monthly magazi...