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Pensions auto-what? HR urged to join forces with other parts of the business to prepare for pensions changes

David Woods , 06 Mar 2012

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It is barely eight months until new pensions regulations come into force requiring employers to commence auto-enrolment of staff into occupational schemes. But according to the CIPP, three-quarters of employers are not communicating this to staff, while the Pensions Trust found in the charity sector, only 9% of employers believe they have ‘total awareness’ of what they need to do in preparation for the changes.

Helen Hargreaves, senior policy and research officer at the Chartered Institute of Payroll Professionals (CIPP)

Employers may not be aware of auto-enrolment responsibilities, when they will have to assess their staff and enrol those between the ages of 22 and State Pension Age with earnings above £8,105 a year, into a workplace pension. It is vital employers implement a process for monitoring when an employee's age or earnings change, as this may result in a jobholder becoming eligible for auto-enrolment.

For the majority of employers, auto-enrolment is not an immediate issue, as they will be coming on board between 2014 and 2017. But we would urge all employers, whatever their size, to find out their staging date (the date they are due to begin automatically enrolling their employees.) This will help decide when to begin considering financial and implementation plans, along with communication strategies.

Auto-enrolment could fall to payroll and the CIPP is working through training to ensure payroll staff will be well prepared and informed.

Robin Hames, head of technical, marketing and research at Bluefin Corporate Consulting

For the minority of employers that will begin auto-enrolment in 2012, there is an argument for starting to build communication momentum, but for the majority the emphasis should be on ensuring this first of all gains boardroom prominence.

For many, communication now could be counter-productive. Experience shows once employers form a working party to consider the ramifications of employer duties, initial assumptions on how to deal with auto-enrolment often fall by the wayside.

The alarming finding is only 25% of employers say payroll, HR and finance will work together. Neither legal departments nor IT are mentioned. This could have dire consequences for business. Auto-enrolment is more than a numbers game; there are nuances to the legislation that will need specialists to contribute to an overall understanding.

Failure to do so could lead to non-compliance, convoluted costly administration and an inappropriate corporate strategy.

HR has launched a Pensions Channel with all the information you need.

 

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