Preparing for, and implementing, auto-enrolment is ‘simple’ and ‘easy’, according to Purdey Wildey, financial controller for beauty organisation, Nails Inc.
As one of three panellists speaking on a session entitled ‘Automatic enrolment at the sharp end’ at the National Association of Pension Funds annual conference in Liverpool on 16 October, she said: “[Auto-enrolment] is maybe overcomplicated because it’s about pension schemes and people think they’re very complicated and they don’t understand them whereas actually I thought that it was quite a simple task. As long as your payroll documents are in order and compliant there isn’t really that much work to do.”
Nails Inc has enrolled around 175 employees and to date has had just one employee opt out of its workplace pension scheme.
But Wildey (pictured right on screen), who said that she knew nothing about pensions before she became aware of auto-enrolment, anticipates potential problems at Christmas when her shop-based employees’ earnings rocket in line with seasonal consumer spend.
She said that this is likely to result in a large number of employees suddenly becoming eligible to be auto-enrolled, which would entail a greater level of administration.
She explained: “The way that we’re structured, our salaries aren’t annual, they’re based on the [performance of the] business, so at Christmas [staff] will earn a lot more than they might do in January. So I was very aware of the fact that [staff] might move between different categories and therefore they might be auto-enrolled but then drop in to a category where they don’t need to be and they might opt out. So my main concern is to ensure that [the pension scheme] is such a good benefit that we wouldn’t have that huge opt out rate.”
Fellow panellist Val Allen, commercial manager at welding manufacturer, General Welding Supplies, faces challenges ahead of her staging date after being told that her two established workplace pension schemes, a group personal pension and a personal pension scheme, are not fit for auto-enrolment.
She explained: “I’ve contacted the schemes to ask them if they could be adapted so that they could support [auto-enrolment] but they said it’s up to me to find out if they can be or not, so it’s all a bit of a minefield at the moment.”
In terms of advice to fellow employers yet to auto-enrol their staff, Allen said organisations should ensure that they are prepared well ahead of their staging date.
She added that industry websites are unclear about what employers need to do and the timeframes within which they need to do it.
But Nails Inc’s Wildey disagreed: “I actually think that they give [employers] more time than [they] need.”