Unfortunately, the likelihood is that all employers will face additional cost and administration burdens as a result of auto enrolment and the employer duties. Here are four basic steps to help you plan and prepare.
This will give you your deadline for implementation and a point to work back from. Your staging date will be based on the number of people in your largest Pay As You Earn (PAYE) scheme as at 1 April 2012.
The dates are spread over five and a half years between October 2012 and February 2018. Larger employers will go first, smaller employers last. View our summary table to find out your staging date.
Every employer in the UK will have some duties to perform but exactly what you'll need to do will depend on the types of worker you employ.
As a rule of thumb, any worker over age 22 and under State pension age, and who earns more than £10,000 a year, will be treated as an 'eligible jobholder'. You'll need to automatically enrol these workers into a suitable pension scheme and as long as these workers stay in the pension scheme, make contributions on their behalf.
You'll also have to provide a pension scheme for workers who don't fall into this category and in some cases you'll also have to contribute.
Even if you already offer some form of pension provision, you'll need to make sure that the existing scheme meets a minimum standard. This generally means that there must be a minimum contribution rate, made up of both employer and employee contributions. If the scheme isn't up to scratch, contributions will have to increase.
Building up these contributions to the minimum standard slowly might be preferable to waiting until the last minute and facing a high up-front bill. If you don't have a pension scheme, you'll have to set one up sooner or later. Again, starting to do this as early as possible will allow you to build the scheme up at your own pace.
There is no doubt that auto enrolment will have cost implications for every employer, large or small.
You'll need to consider how you'll meet these costs.
These are just some of the questions that you'll need to address. Planning ahead, well before your staging date, could help smooth any cost increases, avoiding last minute shocks.
What's clear is that you'll face a major challenge when your employer duties start. With the economic climate as it is, it's probably even more important to plan as early as possible. It won't be easy.
But perhaps Mr Churchill can again offer some wise words: "If you're going through hell, keep going!"
Business Development Manager
A self-confessed 'Pensions Geek', Jamie reads Pensions Acts for breakfast. He's spent the last two years working on auto enrolment and has talked to hundreds of advisers and employers about how they can best prepare.