Case Study: Getting To Grips With Auto Enrolment

Getting to Grips with Auto enrolmentDarren Critten leads our Workplace practice. He works with firms of all sizes to cost effectively add value to their businesses by protecting them from regulation and increasing staff retention.

Darren talks about his recent experience implementing Auto enrolment.

The underlying problem with new regulatory change is that it is designed as “one size fits all.” Government applies new rules, like Auto enrolment based on pretty blunt data. Then they consult on it. Pressure groups and trade bodies represent their member’s interests and again, one size has to fit all.

But we know, no two people are the same. In fact, no two businesses are the same and trying to shoehorn either into the same pension plan simply doesn’t work.

Unintended Consequences

Consider first a business that understands how valuable its staff are. A business that invests in staff training, has protection insurance for valuable team members and has a generous group pension scheme in place. It may even have a bonus scheme. All of a sudden they have to shoehorn their overall staff package into the government’s minimum requirement and new regulatory framework.

John Lewis is a famous example of this. They have said their generous staff benefit packages will have to change to pay for the new National Living Wage and Auto enrolment.

This is an unintended consequence. Just as Auto enrolment has been for some of our clients.

Removing the Shoehorn

I have helped several firms with existing pension schemes, in the same situation as John Lewis.

One firm had a group pension in place. Their accountant and incumbent financial adviser had little understanding of Auto enrolment requirements. The business was going to do nothing, until they realised that their scheme wasn’t compliant.

I helped them by explaining the existing scheme to their staff and potential new members. I helped them to change their documentation and systems to become compliant with minimal cost. We even helped them to access some of our other solutions, like key person insurance.

We had time to work together and build on their existing arrangement to work for the business, staff and the regulator. We even added value by protecting them in case their staff were unable to work.

But not all cases have the luxury of time.

Emergency Call out

I recently worked with an established solicitors practice in Cornwall to implement their workplace pension in record short time.

Now, it isn’t like a law firm is unaware of regulatory changes. That’s their job, they know what’s going on. However, the law is also a labour intensive business. Delivering for their clients takes a lot of their time, and if they are not working for their clients, they aren’t billing.

So it was no surprise when I took a call in the office one evening from a rather upset partner at the firm in question. They had missed their staging date by several months. Faced with a compliance notice from the Pensions Regulator and an imminent fine, they needed immediate help.

I reprioritised my workload and set up a workplace pension in an hour.

Not that I would recommend doing it quite so last minute. This case demonstrates how important it is to choose a financial adviser that knows the rules and can work with employers with diverse requirements.

I supported the firm through complex pension decisions during various remote sessions and often out of business hours. We met the Pensions Regulators’ requirements and the fine was avoided. The client continues to manage the ongoing process with minimal help from us now.

Collaboration is the way to go

Collaboration between accountants, clients and financial advisers is the most effective way to deliver your sustainable workplace pension scheme. After all, you have to live with the consequences of the decisions you make. And if you imagine one size doesn’t fit all for companies, it certainly doesn’t work for the people we all employ.

I have established a way forward for our accountant partners.

Continuum provides a portal so that accountants can control pension related activities for their clients. Safe in the knowledge an expert is handling the 240 steps required to meet the Pensions Regulator regulations.

Together, accountants and Continuum can support our clients to meet your immediate and future needs. You receive expert help to indemnify the decisions you make today for the future retirement needs of their staff.

Failing to act on Auto enrolment can expose your business to sanction by the Pensions Regulator, including fines. Even worse, get your Workplace pension wrong, you could lose high-quality employees and find it harder to recruit in the future.

Contact me today if any of the points I have raised are affecting you too.

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