The first thing to find out is when you need to be ready by. Most salons will have been allocated what’s called a Staging Date by Government. This is a date specific to your business that you need to have everything in place by so you can start enrolling your workers. You can find this out by entering your PAYE reference number into The Pensions Regulator site or Contact Us and we can find out for you.
Making a plan
Decide who is responsible within the organisation to manage the project and draw up an action plan. The advice is to start at least 12 months before your Staging Date, as there is a lot to consider. You will need to think about which pension scheme to use, how to budget for the contributions that you’ll have to make as an employer and the costs of setting up the scheme. You will also need to consider how you will calculate contributions every week/month; which can be done through your payroll software and do an assessment of your workers to find out who you need to enrol and how to communicate it to them.
Choosing a scheme
If you have an existing pension scheme for your workforce you may be able to use that, you should check with your pension provider to see if it can be used for auto enrolment. Even if it can be used, it may not be suitable for all your workers however. If this is the case or you don't have an existing scheme at all you will need to start a new one. Make sure you do this early though as pension providers will be taking on thousands of employers in the coming months (at its peak there will be 100,000 employers a month going through the process). It really does pay to start early - have a look at our half priceEarly Bird Offer.
Budgeting for the increased costs
You will need to consider how you are going to fund the additional costs involved in setting up the scheme, paying the contributions into your worker’s pensions and administering it on an ongoing basis. The scheme is funded by contributions from workers and employers. By the end 2018 onwards, employers will be required to contribute around 3% or 4% of the workers earnings into the pension with the worker having to contribute a minimum of 4% or 5%, depending on which method you choose for calculation. It’s therefore important that you factor this into your business plan and consider how you can grow your income to cover these costs.
In the majority of cases, the law says as an employer that you have to automatically enrol certain workers into a pension scheme, so if you are going to have to do it anyway, why not make the most of the opportunity to reward and motivate your team by presenting it in a positive way.
For many staff members it will be a highly positive thing for them to have a Workplace Pension as, until now, having a pension that your boss pays into may have been out of their reach. You should explain what it means for each team member and include all the communications materials that you are required to give then by law. If you focus on the positive aspects that the additional benefits will bring then it is sure to motivate and encourage good performance, which will in turn grow your income to more than cover the costs. Look at it as a chance to do something really positive for your team that they will hopefully reward you with their loyalty and effort.
Ryan Fox, Pension Set Up Consultant
We can help guide you through every step of the process and you can choose the level of help you require. Have a look at our Services that provide a straight forward approach to managing Auto Enrolment on your behalf or call me on 07702 208311 to arrange a free consultation.