Software provider Advanced Business Solutions (Advanced) is advising medium sized businesses to install pension auto-enrolment payroll software sooner rather than later to avoid fines. The warning follows news of a new report from The Pension Regulator (TPR) that reveals 32,000 medium sized businesses will have staging dates starting from April 1st 2014.
Auto-enrolment is a new legal requirement meaning that every employer in the UK must enrol their employees into a workplace pension scheme. The Pension Regulator said the report would assist pension and payroll software providers with ‘capacity planning’ and that the data should serve as a reminder of the ‘challenges ahead’ should businesses delay implementation.
On April 1, the largest medium sized businesses, those employing between 160 and 249 staff, will be affected, followed on May 1 by those employing between 90 and 159 staff. By the end of 2014, all companies employing more than 59 staff will need to be compliant with the Government’s mandatory pension provision scheme, with the induction of smaller SMEs spread over the next three years.
Simon Fowler, Managing Director of Advanced, said: “2014 is going to be the busiest year yet for auto-enrolment, with April 1 seeing the first of the country’s medium sized enterprises reach their staging date, and several more deadline dates throughout the summer. For those businesses who have not yet acted, in the words of the TPR, ‘the clock is ticking’.
“To avoid a last minute rush, businesses need to take the necessary steps immediately. Installing an auto-enrolment compliant payroll system should be one of the main priorities. Believe it or not, some businesses are still unaware that the TPR will be handing out steep fines to those who miss their staging date and currently the onus is on medium sized businesses to get the ball rolling.”
Advanced has already seen a rise in demand for its payroll solution, OpenPeople, from companies looking to manage their auto-enrolment provision. One of the key elements of the software is its auto-enrolment mail merge schedule, which highlights key letters that are required to be sent to employees as part of the compliance procedures stipulated by the new pension legislation. Importantly, the system continues to ensure future compliance when new employees start.
Adds Fowler: “The software required to ensure that the legislation’s complex compliance requirements are met needs to be in place well before the staging dates. The good news is that help is out there, and the right software, which is quick to implement, can take the pain out of auto-enrolment for those who act in a timely fashion.”
While 2014 is set to be the busiest year yet for auto-enrolment, the next few years look like they may be busier. The latest data from the TPR shows the number of businesses that reach their staging dates are set to rise from 32,000 to 153,000 in 2015/16; and to 617,000 in 2016/17.
Figures from the Department of Business, Innovation and Skills, show Britain’s SMEs – which represent 99.9% of the UK private sector – employ 59.3% of the country’s workforce, or 14.4 million workers.
