Pensions Minister Steve Webb is warning around 25,000 medium sized employers with staging dates between April and July 2014 to "act now to ensure you meet your duties".1
His warning came at the same time as The Pensions Regulator published its latest auto enrolment registration report. We look at why you must start planning well ahead of your staging date.
Why should you prepare early?
First of all, with so many employers staging next year, advisers will find it more difficult to place your scheme with a provider the closer you get to your staging date (NEST being the obvious exception).
Before auto enrolment, when you set up pension schemes on a voluntary basis, providers could generally implement a vanilla pension in as short a time as a week, or even a few days.
But our experience so far is proving time and time again that because auto enrolment brings so many other complications and considerations, it can take many months to implement a pension scheme, regardless of its size.
Contact your adviser now
The other issue if you don't prepare early is you might find out too late that you need advice, by which point your adviser may be too busy with clients staging at the same time as you, who contacted them earlier.
Finding a new adviser close to your staging date may also prove difficult. According to the Financial Conduct Authority (FCA), there are a total of 21,684 financial advisers in the UK as at 31 July 2013.2 But how many will be involved in giving auto enrolment advice? Probably only a few thousand, if that.
In other words, demand will far outstrip supply.
How early is early?
Our current position is that in most cases, we will only provide implementation resource for employers who have at least six months to go before staging. We're not the only ones saying that employers should start early – as the Pensions Minister, Steve Webb succinctly puts it:
"With only six months before medium sized employers enrol their staff the message is clear: act now to ensure you meet your duties."
How we can help
Our Design, Implement Run proposition is specifically designed to help you through your auto enrolment journey from start to finish.
1 The Pensions Regulator press release, "Six month count down for medium sized employers has begun", 17 October 2013
2 FCA Press Release, Adviser numbers in line with expectations, 15 August 2013.