Are You Ready for Pension Auto Enrolment? Part One

Are You Ready for Pension Auto Enrolment? Part One

All businesses will soon have to provide a pension for their staff. The start date depends on the size of your business. But there’s a lot more to think about than just the date. Here are five tips to consider:

Don’t leave it too late. The auto-enrolment ‘to-do’ list for employers will take some time to complete; don’t leave it to the last minute. Collating data can mean sourcing information from various systems. In addition, enrolling employees to the pension scheme could involve changes to their contracts of employment, which requires a three month consultation period. An early start is ideal – 6 to 12 months ahead of your staging date is ideal.

Understand your key dates. It’s crucial that you not only understand when your staging date is, but also any key company dates such as the pay reference period and payroll cut off. Documenting these dates and then overlaying the new dates when actions need to be completed as a result of pension reform legislation will help gauge the impact on the business. It will also help decision making, such as the need for a waiting period and if so, how long it should be.

Quality of data is key. It’s easy to underestimate the complexity of the data you require. You’ll need data for employee eligibility assessment, joining, contributions and opt outs. Inevitably this will come from different sources and systems. It takes a significant amount of time to do this within payroll cycles and the frequency that this data is needed also adds a layer of complexity. The quality of the data and the processes for sourcing the data for each payment cycle will be crucial to how smoothly that works each pay period.

Choice of contribution basis. Your chosen scheme must meet a quality standard, based around a minimum level of benefit or contribution, so you need to start budgeting for any extra costs. There is more than one acceptable contribution basis and they can be mixed and matched across the workforce to suit different reward mechanisms or pay patterns. What will work best for you? The key point is that the contribution basis and definition of earnings can be chosen to suit your business.

Method of contribution. Salary Exchange should also be considered as this can offer you significant cost saving benefits. However, where salary exchange is being used, this decision should be made prior to the scheme staging, otherwise it can cause additional administration for employers.

There is a lot to think about and do when it comes to setting up your company pension. These five tips give you a good starting point and in a future blog we’ll share with you another five tips. In the meantime, if you have any questions about pensions, do get in touch.

How Will Changes to Flexible Working Affect Your Business?

How Will Changes to Flexible Working Affect Your Business?

In November 2012, the Government published its consultation on modern workplaces and said that from 2014 it would extend the right to request flexible working to all employees. This will have a huge impact on some businesses; do you know how it will affect yours? Do you know how to implement the changes so that you stay on the right side of the law?

Flexible working is seen as a benefit to many people, allowing them to achieve a better work-life balance. For many, this actually makes them more productive at work. Many small businesses have allowed flexible working as it helps them recruit good staff. However, for some businesses, the changes could have different effects. If you don’t fully understand how to use flexible working, your business or your employees could suffer.

The right to request flexible working is currently restricted to parents of children under the age of 17 and carers. This will be extended to all employees from 30 June 2014. It will:

  • remove the requirement for the employee to be a carer to qualify for the right to make a request
  • place a duty on employers to deal with requests in a reasonable manner
  • require you to notify the employee of your decision within three months of the application, or longer if this is agreed with the employee.

The provisions that implement the new rights will get rid of the statutory procedure for considering flexible working requests and replace this with a requirement to “deal with the application in a reasonable manner.”

The 26 week qualifying period for employees to make a request for flexible working will be retained and an employee can still only make one flexible working request in any 12 month period.

Acas has published some guidelines which say that as an employer, you should do the following:

  • Arrange to talk to your employee as soon as possible after receiving his or her written request (unless the intention is to approve the request)
  • Allow your employee to be accompanied by a work colleague at any discussion
  • Discuss you employee’s request with him or her, where possible in private
  • Consider requests “carefully looking at the benefits of the requested changes in working conditions for the employee and the business and weighing these against any adverse business impact of implementing the changes.”
  • Inform your employee of the decision, in writing as soon as possible
  • If your employee’s request is granted, or granted with modifications, discuss with them how and when the changes might best be implemented
  • If your employee’s request is rejected, ensure that the rejection is for one of the business reasons permitted by legislation and allow the employee to appeal it
  • Consider and decide on all requests, including any appeals, within a period of three months from initial receipt, unless an extension is agreed with you employee.

This means that you can’t just deny a request for flexible working because you don’t understand it, or think it will have a negative impact on your business! Acas has produced a guide that provides good practice advice for employers, which you can download by clicking here.

More Changes to Employment Law – What You Need to Know

Throughout the year changes are made to employment law. To help keep you up to date, here are some of the more recent changes.

The Right to be Accompanied. Employees have the right to be accompanied at a disciplinary meeting, where they make a reasonable request. What is reasonable will depend on the circumstances of each individual case. However, it would not normally be reasonable for workers to insist on being accompanied by a companion whose presence would prejudice the hearing. Nor would it be reasonable for a worker to ask to be accompanied by a companion from a remote geographical location if someone suitable and willing was available on site.

The Acas code is to be amended to “Employees have an absolute right to choose a companion for a grievance meeting.” Click here to visit the Acas website for more information.

Employee Shareholders. From September 2013 employees can become shareholders if both they and the employer agree all the aspects. Employees can receive £2000 worth of shares and in return, give up rights to claim unfair dismissal, a statutory redundancy payment, a statutory right to request flexible working and a statutory request for study or training. They must also give more than usual notice of return from maternity leave. Click here to find out more.

Pensions Auto Enrolment. From April 2014, depending on the size of your business, you will have to provide a workplace pension for your staff. To do this you need to know your ‘staging date’ and make sure you have information on all your employees. Check your payroll system can cope and that you have enough administration support. To find out who will be included and excluded and when you have to set up company pension, take a look at the Gov.UK website.

In April or May 2014 I’ll be running another Employment Law Update workshop. Keep an eye on this blog and the website for the date and online booking.