By David White, Managing Director, Creative Auto Enrolment

This year, 38,000 businesses are expected to stage for auto enrolment. Auto enrolment legislation was first announced in 2008, as a way to get the UK saving for retirement. All ‘eligible’ employees must now be automatically enrolled into a pension scheme in an effort to help us maintain a decent standard of living in later life.

Many small businesses will be ‘staging’ next year – a staging date is the date by which your company needs to comply with the legislation. Working out when this is, is just the first step along the long road to making sure you are auto enrolment ready. If you’re a small business owner, now is the time to check exactly what you need to do to make sure you’re not late for a very important date.

But why check now if you’re not staging until next year or beyond? We’ve identified 33 different tasks involved in auto enrolment preparation, which take up to 103 man days to complete. On top of this, our research shows that just 15 per cent of businesses due to 'stage' over the next year feel qualified to do so. We are speaking to many businesses which have already missed their staging dates, leaving themselves open to fines which can reach £2,500 a day. Earlier this year we saw The Pensions Regulator order one non-conforming company to pay backdated employer and employee pension contributions of over £140,000, doubling their auto enrolment costs.

Here are some tips on how to make sure you meet your responsibilities in time and avoid hefty fines:

• Know your staging date: Is your staging date in the diary? If not, now is the time to determine when it is. This date depends on the size of your PAYE scheme and will fall within the next three years. The biggest companies having already ‘staged’ and the smallest ones will stage last. Our research has shown that more than half of businesses ‘staging’ over the next year are in the dark when it comes to determining their staging date. Make sure you know when you must comply with auto enrolment legislation, so that you can start planning your preparations. Just remember that you can choose to postpone, but this does not change your staging date!
• Fail to prepare, prepare to fail – Work backwards from your staging date to plan how and when you will get all the necessary measures in place. A quarter of business owners say that not having enough time is one of the main obstacles standing in their way of getting auto enrolment ready, so give yourself plenty of time. There are over 500 pages of guidance from The Pensions Regulator to read through before you begin. Make sure you factor in tasks, big and small.
• Leave plenty of time – Many of the 33 tasks sound simple enough but are in fact far more complex than they may initially seem. The biggest concern for employers is choosing a pension plan to help workers save for their retirement. This is a task normally left for qualified financial advisers and therefore a task that requires serious consideration – and time – from employers.
Auto enrolment is a herculean task for businesses. If you’re not yet confident of your business’s responsibilities and how you are going to meet them, make sure you have a plan in place and the support you need to negotiate the auto enrolment maze.