Read a case study from Dean Casswell at the charity Bag Books on why they staged early and the challenges faced by a small employer.
1 February 2017, brought forward to 1 July 2013
You need to allow a good amount of time to go through the information and work out exactly what you need to do.
Bag Books is in South London and we provide multi sensory books and storytelling for people with severe or profound and multiple learning difficulties. We’re just a little charity and can’t pay fantastic salaries, so we try to do what we can for our hardworking staff when we can.
I moved here six years ago and the larger charity where I had been previously had offered a pension scheme to employees. I was well aware there was a bit of a gap here in what we offered staff. There were also only two of us who had any pension, I thought it was a good idea to stimulate colleagues into retirement saving.
Hearing the law was changing spurred me on to do something, which I might have let drift even longer otherwise.
Also, a lot of our money comes in grants which we have to apply for many years in advance. We get used to planning further ahead – so I thought well, it’s better to move everything forward and get automatic enrolment built into budgets earlier rather than wait until we had to.
It was back in 2012 when I started to research exactly when we would need to act. I was surprised that weren’t actually due to stage until February 2017. I thought that was such a long way off that I looked into going early and bringing forward our duties. (Note: Employers can elect to stage early, but must notify The Pensions Regulator a month before the new (earlier) staging date. For more information go to bringing your staging date forward).
Then I did lots of research, mainly on provider websites. Back in 2012, most of the information seemed to me to be irrelevant for the small employer. It was aimed at the big employers. But then even small employers can pay bonuses and have overtime and other complexities, so decisions such as what earnings to assess – what to include and what not to include – may not be obvious.
For us at Bag Books, it was reasonably straight forward, because we don’t have a lot of overtime – and most of our staff don’t have any. Nobody here gets bonuses or anything like that, so that didn’t come into it either.
We had to get all our staff records up to date – you have to have the right data for assessing the workers and for sending out the statutory communications.
But then with only ten people when we decided to introduce automatic enrolment it wasn’t exactly a major admin task to get all those details updated.
We outsource our payroll so it also took some time to ensure all the information needed was with them and in the right format – it was bit of a learning curve for them too.
It did take quite a few months of sorting it out and getting it together, it slipped three months from the date we’d originally planned, but we didn’t know how long these things would take. I would recommend that other small employers allow a really good amount of time to go through all the paperwork and work out exactly what you need to do.
When it actually came to it though, I thought it was quite easy. You had three different letters: one letter to people who didn’t qualify for automatic enrolment, another to people who were borderline and a third letter to everyone else. It was just working it all out and going through the paperwork and maybe now there are user guides that are a bit simpler.
(The Essential guide to automatic enrolment was launched in June 2014, this includes information on how to find out about the three types of workers: eligible jobholders, non-eligible jobholders and entitled workers).
I think it has been quite a positive thing for our employees. They think it is good that we are doing this and as time goes on and we see more in the press I think my colleagues quite like to say, "oh yes automatic enrolment, we’re already doing that".
The bottom line is that there were only two of us who had any sort of pension before we staged and now we’ve now got eight people saving into a workplace pensions – that’s quite an increase in the number of people who are doing something