So what is the true cost of auto-enrolment?
Here are the top 5 ways to reduce the cost while adhering to legal requirements?
1. Workforce analysis
Along with helping you find out an employee’s eligibility, a proper analysis of your workforce will help you find out the possible levels of administrative time and employer pension contributions required. It will also enable you to plan ahead and decide whether you need a new payroll system or a specific pension scheme.
2. Salary exchange (sacrifice) scheme
3. Pension scheme review
Review your current pension scheme and find out if it meets qualifying criteria. If it doesn’t choose a new one carefully as charging structures vary from one pension scheme provider to the next. The arrival of new providers has further created opportunities for better deals but they impose strict criteria. The key here is to get started now as the schemes you can choose will be limited as time goes on.
4. Payroll systems
Invest in a payroll system that can automatically identify ‘eligibility’ trigger points such as a pay-rise or a 22nd birthday – these triggers can turn a non-eligible jobholder into an eligible jobholder. The savings will not be visible immediately, but in the long term a robust payroll system will save you time spent on manual calculations – especially true as employees will have to be opted back in every 3 years to then be opted out again if they request it.
5. Opt-out system
Lastly, businesses with high staff turnover and/or high numbers of short-term staff could ensure to have a payroll system that allows workers to join and leave the pension scheme efficiently.