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Auto-enrolment demystified

24th October 2012

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Graham Foster, director of CBW Financial Planning, offers practical step-by-step advice on how MGI member firms can help their SME clients prepare for auto-enrolment.

Many firms mistakenly believe that implementing auto-enrolment will be a simple process. Others are even more mistaken in believing that no change is necessary as they already have a pension scheme in place.

Sadly, as with many government initiatives, this one is definitely not simple to implement and non-compliance cannot be taken lightly as repercussions start with a notice but quickly escalate to daily penalties ranging from £50 per day to £10,000 per day.

CBW is advising SMEs to start preparing now as the requirements for the scheme are far reaching. It’s not just a qualifying pension which needs to be in place; the employment contracts, handbooks and pension policies will also need updating and the payroll system may also need amending.

To help SMEs meet these new obligations, CBW is currently working through a strategy for the CBW Auto-Enrolment Implementation Service. The objective is for our team to combine the internal expertise of  financial planning, pensions and HR who can work with your clients on an advisory level or, if required, on a more detailed hand holding level.

Issue facing your SME clients How CBW can help
Will you be ready on time?


Estimates are that a business will need a full year to implement all of the changes that are required

CBW can identify all of the required changes and make recommendations with regards to how and when they could be implemented.
Does the existing pension scheme qualify? CBW can advise on whether or not the existing scheme qualifies and, if necessary, can make introductions to suitable alternatives.
What contributions do you have to make, and by when? CBW can quantify the contributions and determine when they will fall due (the contributions are being phased in).


In many cases there will be a role for the accountant to help the business make the necessary provisions.

Do you know which employees are eligible and what income qualifies? Despite the scheme being for “all employees”, there are some who fall outside of the programme due to their age or their earnings. CBW can advise on how to qualify each employee.
Have you enrolled your business and your employees? There is the requirement for the business to register itself and to enrol all eligible employees. CBW can advise on how to manage this process.
Do you need to update your payroll process? CBW can advise on the necessary payroll system requirements.
Are your communications with staff compliant? There are strict rules on how, when and how you can communicate with staff and even stricter rules on communicating with anyone opting out of the programme. CBW can advise on a communications programme which would be acceptable to the Regulator.
Will your employment contracts, handbooks and HR processes be rendered useless? CBW’s HR advisors can recommend the changes that are necessary with regards to employment contracts, HR processes and staff handbooks in order to bring them into line with the new legislation.
What do you need to do now? Many SMEs don’t know where to start but CBW has a guidance note with the key facts they’ll need to consider before they can get started.

The CBW team is happy to work with your clients. Please get in touch with us if you’re interested in finding out more or if you would like to introduce one of your clients.