Auto Enrollment is here to stay the current negativity surrounding it needs to be addressed

“Another tax on small business’s”

“More government red tape”

“The government will change the goal posts, it always does

“So, how many small businesses who employ 1 or 2 people, will decide, "enough is enough" and simply give up? “

“ My client is struggling now this will tip him over the edge”

These are only a few of the many comments being posted on all the different forums, most of which are negative towards auto enrollment.

All SME’s and most Micro Employers will have to auto enrol and can either do it in a positive or negative manner “ it’s the Like it or Lump it scenario”

A positive approach has got to be the way forward, engage with your employees spend some time researching the best solution for you and them or pay a professional to do it for you its your choice. “An engaged employee is a more productive employee “which is a benefit to your business.

Employee turns up at a client on Monday morning looking glum; client says, “What’s up” My boss put us in a pension and its costing me money.

Employee turns up at a client on Monday morning looking happy; client says, “Why are you so happy” My boss put us in a pension to save for my retirement and every time I pay in he pays in to.

Which one gives your client the best impression of you as a company?

Auto enrollment is going to increase costs for all employers, if your costs increase so will your competitors. The actual costs of having a work-based pension in place are dependent on the salaries that are paid.

Based on a 37.5 hour working week and scheme is based on qualifying earnings.

1% Contribution level:

Employee £14,000 pa Annual cost £82.28 hourly cost £0.04

Employee £45,000 pa Annual cost £360.93 hourly cost £0.19

2% Contribution level:

Employee £14,000 pa Annual cost £164.56 hourly cost £0.08

Employee £45,000 pa Annual cost £721.86 hourly cost £0

3% Contribution level:

Employee £14,000 pa Annual cost £246.84 hourly cost £0.13

Employee £45,000 pa Annual cost £1082.79 hourly cost £0.56Opting for a salary sacrifice scheme can reduce these costs; you need to make sure that it is suitable for the workforceYou would also expect to pay increased costs for payroll etc. a rough guide for 1-5 employees would be £240 pa or £20 pcm

Initial set up costs will vary dependent on which way you decide to implement your scheme. Without employee engagement you would expect to pay a one off fee starting from around £500.

These costs need to be factored in to product or service pricing which will require the employer either with or without their accountant to revisit the business plan and adjust margins accordingly. This is a great opportunity for accountants meet with their clients and to see what’s really going on in their businesses.

Payroll Professional’s unfortunately the work load is going to be dumped on you by the employer you can see this as an inconvenience and additional costs to running your operation, or you can see it as an opportunity to add value to you operation and gain new clients the choice is yours.

We all no that payroll software and middleware is an extra cost implication and currently not all do what it says on the tin. Market forces will determine which is the most cost effective and user-friendly system to use and as 2016 approaches the cream will come to the top.

In conclusion auto enrollment is here to stay just like RTI, let’s embrace it, raise awareness with employers get them engaging early it will pay dividends and by 2018 it will all be done and the next piece of legislation will be hoisted upon us and the process will start again.

Steve Preston, National Accounts Manager

Updated at 2015-01-09 16:49:32