As the first wave of auto-enrolment stagers approach their two-year anniversary, we thought it would be the perfect time for you to stop, take a minute and think about your current auto-enrolment support package, and ask yourself ‘is it really working for me?’.
Below, Johnson Fleming has outlined its top five warning signs that tell you it’s time to consider a move of support or scheme before the pensions landscape changes once again in 2015–16.
1. Are you spending inordinate amounts of time manually communicating and administrating your scheme?
When auto-enrolment was born, many of the larger employers that staged first scrambled to find qualifying pension schemes to meet the relevant criteria. However, two years on, many of you are finding that staging was the easy part, and the copious amount of admin required, along with the arduous task of communicating with many different stakeholders at different times, and co-ordinating this with payroll, has presented a whole new set of problems.
If you or your team is spending more time administrating your workplace pension scheme than doing their day job, then you must definitely make a change. There are easier, more fluid and holistic options available now than ever before.
2. Are your auto-enrolment systems and processes failing you and your business needs?
Auto-enrolment affects many different systems and business processes, from payroll to HR. With so many siloes of data, are you struggling to unify the information into a manageable and co-ordinated pot? If you are, then review your support provider and the wider market as there are options out there to reduce the burden this has placed on finance and HR teams over the past two years.
3. Does your current auto-enrolment scheme have high annual management charges (AMCs)?
In April 2015, all AMCs will be capped at 0.75 per cent. So if your current scheme has annual charges above that figure, then it no longer qualifies as an auto-enrolment pension. It is critical, therefore, to take action now to address this and allow time for changes to be implemented.
4. Does your current auto-enrolment scheme have active member discounts (AMDs)?
A year later, in April 2016, there will be a total removal of AMDs. Again, if your package currently includes AMDs, as many do, then in less than two years it will no longer be considered a qualifying pensions scheme. As with AMCs, this legislative change will require action, not apathy, so make sure you check the terms and conditions of your scheme and if AMD is a feature then act now.
5. Do you pay consultancy charges or commission?
Commission on all existing schemes is shortly set to be removed entirely, so if your adviser is currently paid this way you’ll need to review your scheme to ensure you’re able to accommodate the commission removal deadline in April 2016.
While the dates mentioned above are those set by government, many providers are implementing the changes earlier.
For more information on changing your support options, or to download our free guide, please click here or call 01527 571 300.