Nutrition provider Dr Schär UK has completed preparations to begin auto-enrolment in January, nine months ahead of its staging date, in order to ease its reporting and payroll processes.
Before the start of auto-enrolment two years ago many industry experts debated whether small and medium-sized employers would be ready to fulfil their employer duty of offering a workplace pension scheme to eligible staff.
Companies must engage with their provider and find out if they have the capacity to meet requirements
Saq Hussain, PwC
Dr. Schär UK’s auto-enrolment team has said that forward planning, proactive communications and professional guidance from their pensions provider has helped streamline preparations to begin AE in January.
The company of 30 employees put in place a plan to meet the challenges smaller companies could face when auto-enrolling.
Sarah Blyth, HR and facilities manager at the UK branch of the European specialist nutrition provider, said the company wanted to avoid a last-minute rush after discovering the complexity of the task ahead.
“As a generalist working laterally across HR specialisms, I was tasked with the process,” said Blyth. “I did a lot of research and realised it was complex.”
The decision to stage was made for a number of reasons that Blyth said would aid the company in the long-term:
Timing the staging to coordinate with the company’s financial year aimed to alleviate some of the additional administrative pressure on time, resources and budgets;
Changes to payroll were also necessary but involved updating the current service to a pensions version offered by the system provider;
The company also felt a corporate responsibility to its workforce and hoped to encourage young employees to start saving for their future.
Not wanting to feel “led by legislation”, the company aimed to instil a proactive approach to financial planning by showing their own commitment to surpassing statutory minima.
“Our policy on the staging has been very good for workforce retention,” said Blyth.
She added that the company planned to enrol all employees, even if they did not meet the minimum requirements.
The SME challenge
Concerns have been raised by consultants and pensions schemes about the number of employers who have left staging to the last minute.
Without significant forward planning and a structure in place, the steps to enrolment can put increasing strain on company budgets and resources.
Saq Hussain, head of defined contribution pension consulting for the north at PwC, said that all too often companies are under the assumption that their current pension provider will have the capacity to deal with their requirements.
“Companies must engage with their provider and find out if they have the capacity to meet requirements,” he said. “The demands of the Pensions Regulator are high and firms must work to ensure that their statutory communications are in place.”
On a smaller scale, the demands of AE staging on company resources must not be underestimated.
Adam Bexson, SME specialist at consultancy Barnett Waddingham, said: “It’s complicated for the smaller employer to quantify the time required to complete the process.
“Without full understanding of the compliance issues, the intricacies will be difficult to keep up with.”
Dr. Schär UK sought to communicate its plans widely, planning a raft of in-house seminars that lay out the potential benefits of saving early.
The company made the decision to gain external help with the AE planning process. After speaking with a number of providers it was approached by Barclays, which already supplied the company’s corporate banking service.
Blyth said the service provided was very efficient; the provision of a spreadsheet schedule with simplified steps helped to clarify the process timeline.
“Barclays provided the assurances of corporate governance, legal compliance and an audit trail that made the whole process less daunting,” she said.
