Top 5 Auto Enrolment Pitfalls for Small Businesses

The key to getting auto enrolment right is good preparation – and avoiding these five common pitfalls.

1 – Thinking it’s just about staging

Your staging date should be the most important date in your auto enrolment calendar, but a lot of small businesses don’t realise that it’s only the start of their obligations. Auto enrolment means administration every single pay period including calculating contributions and checking your employees’ status. That’s a lot of extra admin and you’ll need to do it every single week if you pay your staff weekly.

2 – Not getting your information right

Don’t have complete information for all your employees? That’s going to cause issues. There’s a lot of information to get straight about automatic enrolment, but the key is to make sure you have your employee data right as you need to enrol them into the pension automatically – that means without any input from them.

It’s also important to make sure that you’re 100 per cent sure of when your staging date is – you can check it on the Pensions Regulator Website here

3 – Assuming you can use your current pension

If you have a workplace pension in place already, you might assume that it is going to be auto enrolment compliant. Even if it’s not, your provider will be happy to take you on with an auto enrolment pension, surely? Unfortunately that’s not the case and many small businesses may find that they have to change providers at very short notice as a result.

4 – Believing your employees will all opt out

So far, less than 10% of employees have opted out of automatic enrolment. It’s unlikely that you’ll see any major savings from opt outs – so prepare as though none of your employees will.

5 – Hoping your current systems can deal with it

Autoenrolment is as much a payroll and HR issue as it is a pensions one – much of the work needs to be done by your payroll provider to calculate contributions, work out who qualifies and more, and your HR systems will need to keep track of who’s in and who’s out.

As long as you can steer clear of these five pitfalls, as well as making sure that you’re prepared in time, then automatic enrolment should run smoothly for you and your employees.

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