Mark Baker: Steps to make auto-enrolment easier

All employers with at least 250 UK workers should now be planning for pensions auto-enrolment, and there are some simple steps that will make the process easier.

First, decide early on a pension provider. Do not delay this decision because there are fears of a capacity crunch among providers in 2013 and 2014. If employers leave it too long, they will find it harder to negotiate contract terms and management fees, because providers will know they have to sign up before their staging date.

Second, be clear about which workers need to be auto-enrolled. This involves looking closely at the status of consultants, contractors and secondees to establish whether they are workers. Employers also need to look at staff who have moved to or from the UK. Care is needed where the employment status of a group or individual cannot be confirmed with total certainty.

Third, if an employer is changing pension contribution levels, it might need formal consultation, which could take at least 60 days. If it offers flexible benefits or salary sacrifice arrangements, it must consider how auto-enrolment affects these.

Fourth, plan for the impact of auto-enrolment in any corporate restructuring or acquisitions. If UK workers are being transferred from one company to another, this will trigger the need for them to be auto-enrolled straight afterwards.

Finally, the payroll function is key to successful auto-enrolment compliance, so the sooner employers sit down with their payroll providers and talk the changes through, the better.

Mark Baker is senior associate at Pinsent Masons