It is now time for the SME market to prepare for auto-enrollment. Perhaps an odd statement given that many SME’s will just be receiving auto-enrollment letters now highlighting their staging date in the next 12 to 18 months and that for some it will be 2017.

You can see the staging dates still to be reached for medium and small employers via this link. But, that time frame refers to the ‘staging date’ registration and so the timeframe for a business to have obtained the required information, informed its workers and to have found a provider is shorter. You will also see below that employers with 59 to 89 workers have little time remaining.

There are a number of concerns, not least, will there be a choice of pension provider in the market? Pension providers are commercial organisations and the return on providing pensions from a small workforce or a workforce where contributions will be low may not provide a high enough return.

While a big cost to employers, the minimum 2% contribution (1% employee and 1% employer until October 2017) is less attractive to the providers. Many providers continue to bring out simple standard offerings but many are turning business away or have expressed concern that they will not be able to meet demand. It is clear that the offerings, if available, may be standard products. However, for the employer it is going to take time to find a suitable provider. This means that the basic information that is required will need to be obtained, communication with the workforce, including the right to opt out, will need to begin and intermediaries will need to be approached. This is likely to be a long and frustrating process so prepare early.

You can obtain the following from ACCA:

• An employee guide to auto-enrollment that employers can provide to employees is available.  This highlights the increase in contributions from 1% to 3% for the employee and 1% to 5% for the employer.

• An engagement letter highlighting the services provided to an SME by a practitioner. This needs to be read in conjunction with the companion ACCA Engagement Letters.