Despite calls from industry experts to start thinking about automatic enrolment 18 months before their staging date, a recent survey from IRIS Software has found that just 18% of small businesses have started making preparations for the change.
Leading payroll software provider IRIS surveyed 160 small and medium sized businesses throughout August to determine how prepared the are for automatic enrolment, the flagship component of the government’s workplace pension reform. While many larger employers have already had to start complying with the legislation, smaller employers will see it applied to them over the coming months.
But out of the employers that participated in the IRIS survey, only 18% of them had already begun preparing for automatic enrolment. 16% planned to start 12 or more months before their staging date, with a further 30% planning to start preparing between 6 and 12 months prior to their staging date. The final and largest group (35% of respondents) answered that they were not planning to start their preparation process until less than 6 months to their staging date.
Mark Paraskeva, CEO of IRIS SME Division, commented on the findings, saying “It is really worrying that a large proportion of businesses are planning on leaving their automatic enrolment preparation until the last minute. We believe that many smaller businesses feel that automatic enrolment does not apply to them, or will not apply to them for a few years.”
Businesses who fail to comply with the legislation are at risk of fines of up to £10,000 per day, so this is certainly not something which should be ignored or rushed. Businesses need to ensure they allow enough time to fully prepare their processes and should leave at least 18 months before their staging date to start preparing. Now, some pension providers are starting to turn business away from firms with less than 6 months to their staging date.
“There are a number of steps employers need to take in preparing for automatic enrolment, but the first of these is to educate yourself and your team,” Paraskeva continued. “This is a vital step to ensure businesses understand the processes involved and can plan accordingly. The main piece of advice we are giving companies is to educate themselves on the legislation - to understand why it is being introduced and the effects it will have on their operations.
At IRIS, we have developed a complete solution to help businesses prepare for automatic enrolment. This solution includes compliant payroll software, employee assessment module, free and paid for training, a free “health check”, consultancy and more.”
For more information visit iris.co.uk/autoenrolment