Auto-enrolment

The automatic enrolment legislation will require employers to automatically enrol their employees into a pension scheme that meets minimum quality requirements.  In many cases, most or all employees will be eligible.  In addition, for the first time in the UK, employers will be legally required to contribute to a pension scheme.

Many employers may have a nasty surprise in store in the shape of increased pension costs and administration burden.  There will be much for employers (and, in many cases, pension scheme trustees) to do, so early consideration of the issues is vital if these nasty surprises are to be managed effectively.

We advise clients on the actions they will need to take when preparing for automatic enrolment, covering key areas such as:

• assessing whether existing schemes meet the minimum quality requirements and, if not, advising on what changes are required and assessing the potential costs;
• advising on whether to use an existing scheme to automatically enrol employees, including modelling costs and possible steps to mitigate costs;
• advising on the costs and implications of other approaches, for example using NEST for some or all employees or setting up a new, potentially more flexible, scheme;
• advising on associated benefit design issues where there may be an impact, for example life assurance and salary sacrifice;
• advising on the potentially complex administration requirements, including working with systems providers on the required changes to administration, HR and payroll systems to ensure administration is handled as efficiently as possible;
• production of employee communications;
• setting up new pension arrangements (where required); and
• project management.