Top ten auto-enrolment tips for a smooth implementation

With just over a year to go before the largest employers begin auto-enrolling workers into pension schemes, companies need to be prepared, a provider says.

Friends Life head of corporate benefits marketing Martin Palmer (pictured) said employers should start planning now.

He said: "It's important that employers start thinking about how they will manage auto-enrolment well in advance of when it goes live. Making sure there is a qualifying scheme in place and ensuring reporting and compliance regulations are met will require careful planning and preparation, but by starting early the new obligations can be smoothly managed."

So here's the ten-point checklist for employers ahead of auto-enrolment responsibilities kicking in next year.

1. Know your staging date which could be from 1 October 2012 to 1 February 2016 depending on the size of your PAYE scheme. Click here for a table of the staging dates.

2. Get familiar with the far reaching and detailed reforms. Get up to speed, and keep up to date with developments as more changes are introduced. Friends Life offers a basic guide to auto-enrolment here.

3. Know your workforce. Workers fall into three categories: eligible jobholders - who are enrolled automatically; non eligible jobholders - who can chose to opt into the automatic enrolment process and entitled workers - who have a right to join a company pension scheme, although not to receive an employer contribution. Knowing how employees fit into these categories is essential to gauge the impact on your business.

4. Calculate the cost of contributions and implementation. Contribution levels, which are being staggered to smooth the financial implications on employers are not the only costs associated with auto-enrolment. The cost of resource, time and implementing systems and procedures must also be considered.

5. Set up a scheme or ensure your current scheme meets the qualifying criteria. If you have an existing scheme you'll need to set up a private occupational or personal pension scheme or sign up to the National Employment Savings Trust.

6. Build a team. The size of your company will affect the human resources required, but it's important to ensure there is someone in place to cover all bases, including administering the scheme, arranging contributions, automatically enrolling staff, implementing systems and meeting legal and compliance duties.

7. Communicate change. Most people will be unaware of the upcoming changes and there are strict guidelines around communications to employees that need to be met. Keeping staff informed and up to date is essential.

8. Prepare systems and procedures. Putting efficient and effective systems into place will help smooth the transition to auto-enrolment. It will simplify processes and provide ready access to information for compliance and reporting.

9. Don't go it alone. The scale of reform and tight deadlines can be overwhelming so seek professional advice from your provider or adviser to ease the pressure of organising a qualifying scheme and to ensure all requirements are met.

10. Think differently. There are a huge range of benefits from having a positive workforce which is engaged with saving and better prepared for their future. You can use auto-enrloment as an opportunity to set your scheme apart and pension provision can become a badge of honour and testament to the quality of the business.