Lee Hollingworth, head of defined contribution pensions at actuary Hymans Robertson, said: "Employers can't afford to underestimate the length of time they will need to prepare for auto-enrolment. For some large organisations, we're talking about the biggest change to their benefits system for years, possibly decades. We're therefore advising companies that they will need a window of at least 18 months to plan and prepare for it.
"Getting a business ready for auto-enrolment is far from straightforward. It won't just impact on pension costs to get up and running and be compliant; it is also likely to require substantial investment in payroll, HR and systems, which could require significant overhaul.
"You then have the ongoing additional resource required to monitor, administer and manage the larger number of employees in the pension scheme. The Pensions Regulator last week also confirmed it will be writing to employers 18 months before their staging date to point this out."
Hymans Robertson suggests organisations lay out a five-point roadmap to run across the 18-month timeframe to be ready for launch. The roadmap should include the following phases, it proposes, each of which needs to be worked through in turn to deliver a viable scheme for employees on time:
1. Set objectives for the 18-month project
2. Get the financial design of the scheme right
3. Assess in-house resources and external provider capabilities
4. Set up systems, payroll and administration processes
5. Design and deliver effective employee communications
