NEST and Me – 5 things I discovered about auto enrolment
Posted on 22nd March 2017 at 18:58
NEST* workplace pension scheme
So, I have passed the staging date and have run the first payroll month with the auto enrolment pension system I had set up. Admittedly this was not for a large workforce but the principles are still the same – I looked at the options, looked at the budget (not very much at all!) and at the time available to do this. Here’s what I found…..
1 A long steady journey, not a hurried race in one go
Auto enrolment is a process you go through over a period of months or even years from initial letters about it, to notification of your staging date, deciding on the options for you and on until the date arrives and you have to put it into action.
2 Who the heck am I?
The best piece of advice I have received about processing pension schemes through payroll (private, employment or otherwise) is this – “you are an administrator, not an advisor”. I know this may seem obvious but it helped me keep the process in perspective. I can talk about the how’s and the when’s of the auto enrolment scheme, and even to some extent the why’s but I cannot tell people whether they should or should not opt out, what contributions they should make or what they would get back at the end of it. That is not my role. And as much as I may like to express my opinions, they are just that, my opinions, and not realistic advice based in fact. One of the great privileges of being an employer is helping, advising and supporting your employees but it has to be within your field of expertise and knowledge.
In the spirit of the above I will say that the following is just my experience and my choices based on my circumstances, shared with you to show that it may not be as confusing or all time consuming as it first appeared, one business owner to another.
3 Simple and straightforward is good
I originally started researching options when I was running the payroll for another company. They already had a personal pension scheme in place and I looked at ways to use this to meet the requirements of auto enrolment. I went to several seminars organised by business organisations and accountancy firms to hear others explain the requirements and options. And through all of these the message I came out with was that there were lots of talented people offering lots of interesting solutions but these all obviously came with a cost.
When it came to choosing an option to set up for this company I chose to use the NSET workplace pension scheme. In a field in which I have little knowledge, I felt reassured that this scheme would meet the requirements. I found the website reasonably self explanatory, particularly once I had picked up some of the vocabulary. But I think what I really liked was the Help Centre. Everything was broken into topics and I could jump in and out as my next question came up. And it was written in a way that was easy to understand and didn’t make me feel I was asking something daft!
For a quick summary on NEST, what you need to do and where to find information look at the Employers’ guide to auto enrolment and NEST .
4 Talk, talk, talk and then action
Talk to those involved in the process – the accountant, the payroll provider*, the employees but then make a decision and get on. I only really started to learn about it once I got into actually doing it.
*The payroll provider in this was QTAC and they certainly were very helpful.
5 Pre-emptive action
From the questions I have already heard I know that the next big query will be when the employee contributions go up. For those on low pay, as the contribution rates change, they may be concerned as they see their take home pay affected.
The Pensions Regulator tells us what employees and employers will be paying in the next few years here but in summary:
Date Employer minimum contribution Staff contribution Total minimum contribution
Until 5 April 2018 1% 1% 2%
6 April 2018 to 5 April 2019 2% 3% 5%
6 April 2019 onwards 3% 5% 8%
My intention is to look at a few more question and answers every month when I go into NEST to make my submissions, and hopefully that way I will continue learning more about the process. At least I know I have somewhere I can go to find some answers!
*NEST is the National Employment Savings Trust http://www.nestpensions.org.uk/schemeweb/NestWeb/public/home/contents/homepage.html
You can also find information about auto enrolment from The Pensions Regulator
Tagged as: auto enrolment, NEST, workplace pension
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