Before the auto-enrolment legislation comes into effect, the Pensions Regulator has published an online guide on auto-enrolment for employers, describing the procedure.
“Easing burdens on small employers will be key to making auto-enrolment a success. That is why the regulator’s new tools will be a simple and practical way for small businesses to learn about their duties,” said Pensions minister Steve Webb.
The interactive tool requires employers to fill in basic details such as the number of people they employ, their pay-as-you-earn reference and salary information, and in turn gives out information on staging date, the employees that need to be auto-enrolled, their duties and contribution amount and the process to enroll staff members.
“We urge all employers to look up their auto-enrolment duty date so that they know when the new law will apply to them,” said Bill Galvin, chief executive of the Pensions Regulator.
The administrative challenges faced by employers are staggering, said Malcolm Small, senior pensions policy adviser at the Institute of Directors, and added that despite the government’s best efforts, employers would still struggle to comply.
In a bid to encourage more people to save into workplace pensions, the government will introduce auto-enrolment in a staged manner from October 2012, extending to February 2016 to avoid any rush. Employers will be required to enroll all eligible employees in a qualifying scheme and make minimum contributions, to be hike in phases in the future.
The government has already set-up the National Employment Savings Trust (NEST), a workplace pension scheme to help all employers meet their legal obligations.
“The vast majority of small businesses will be nervous about this and will want to get it right and should seek guidance. I am not convinced that many people will opt out because the complicated process of doing so will deter them,” said Allan Maxwell, director of Corporate Benefits Consulting.