Three years on from the advent of Auto-Enrolment (AE) in October 2012, over 50,000 UK employers have now implemented compliant workplace pension schemes for their workforces.
Failure to get AE right can be costly, regardless of your business size. Employers who fail to comply can face a £400 fixed penalty followed by escalating daily penalties of between £500 and £10,000 depending on their size. Between October 2012 and June 2015, the Pensions Regulator issued over 300 fixed penalty notices to employers who failed to comply fully with some of their AE duties.
Now that the majority of the larger employers have been through the ‘Auto-Enrolment mill’ we have seen the pressures it can create for a business first hand. Not only will you be faced with additional administration particularly in relation to your payroll functions, your business strategy and existing pension arrangements can also be impacted.
Whilst many larger employers have the benefit of in-house expertise to navigate these hurdles, smaller employers will have the same challenges to deal with but potentially without the same level of resources. IncorporAtE at Kerr Henderson can help you steer your way through all aspects of the AE journey.
From our experience to date, regardless of the size of your business our message to employers is – plan early and seek advice when the time comes to choose your pension scheme. If you are unsure of your staging date – the date by which your business must comply with the new rules – you can use your PAYE reference to check this online (via the TPR’s (The Pensions Regulator) website). You should give yourself a minimum of 6 months prior to your staging date to plan, implement and communicate your AE strategy.
We believe however that employers shouldn’t see AE simply as a compulsory measure through which they have to provide a workplace pension scheme but also as an opportunity to think about “total reward” packages for their employees which can include death in service cover and healthcare benefits.
Employees are becoming more and more focused on the importance of employee benefits as part of their package with an employer. Retention of good employees is becoming a key priority for many employers and the benefits provided to staff can become a critical factor in the attraction to, the retention of, and future loyalty to, the business.
A group life scheme - which normally pays a tax-free lump sum in the event of the employee’s death whilst in your employment – can for example be a low cost benefit option. Our experience has shown that employers who have not considered this cover before are pleasantly surprised at cost of this type of cover and the value it provides, considering that, in most cases, no health or medical evidence is required.
Another increasingly attractive and cost effective employee benefit is a Health Cash Plan. Starting from as little as £1 per employee per week, this provides a range of cash benefits to cover the cost of dental, optical and medical treatments. As this provides an employee with money back in their pocket it is perceived as one of the most valuable employee benefits.
Group Income Protection and Private Medical Insurance are more expensive benefits but the quid pro quo for the employer should not be ignored. Both covers focus on helping employees when they are ill or have a medical issue.
Income protection cover is designed to offer income cover for an employee who cannot attend work, generally for a longer-term. From the employer’s point of view however this type of policy includes rehabilitation services the aim of which are to reduce the period of sickness as much as possible. The purpose of Private Medical Insurance (PMI) is to provide medical treatment faster for an employee for any acute medical conditions which may occur thereby also potentially minimising the employee’s time away from work. For a smaller employer these cover options can be very valuable.
Whilst IncorporAtE at Kerr Henderson can simply support you through your AE journey, we can also advise employers of all sizes with regard to the design and implementation of cost effective employee benefits for their staff.
Hundreds of businesses across the UK have chosen IncorporAtE as their employee benefit solution of choice.
If you would like to find out more about how IncorporAtE can help you -
Visit: www.incorporatebenefits.co.uk
Email: incorporate@kerrhenderson.com
Telephone: 0845 247 7777
Tweet: @IncorporateUK