Advanced Business Solutions, a tech company that enjoys a reputation as an industry leader and software provider, has issued a second warning: If businesses fail to adhere to new resolutions that make pension auto-enrollment mandatory, they'll pay hefty fines -- and they'll pay them soon.
Down to the Wire
These warnings come on the heels of earlier notifications issued by The Pensions Regulator (TPR), which advised dawdling businesses to clean up their act before they missed the pending deadlines this autumn.
The new auto-enrollment law requires all employers to register their employees for pension plans. The law's intent is to improve on less-than-stellar workplace pension provisions, which in most cases already exist. Many of the largest businesses have already rolled their systems over, because their compliance was required in October of last year.
For smaller businesses employing anywhere from 1,250 to 1,999 individuals, the September 1st deadline has just passed, but for companies whose staff size ranges between 800 and 1,249, and even smaller operations with 500 to 799 employees, the deadlines are October 1 and November 1, respectively.
The Cost of Noncompliance
Rolling deadlines have made the massive overhaul easier for regulators to keep up. As a result, no company that misses the deadline is going to get a pass; every offending operation, big or small, will be required to pay the piper for noncompliance. Advanced Business Solutions suggests that companies that hope to comply quickly and easily should implement the correct software, and approach the business of auto-enrollment comprehensively. The company offers services for businesses of all sizes that are hoping to administer the auto-enrolment rollover painlessly.
The managing director of the commercial division of Advanced Business Solutions, Simon Fowler, says, "The stakes are high for all businesses -- too high to risk getting it wrong. Businesses that mess up and miss deadlines will find the financial consequences are staggering."
A company with more than 500 employees, for example, can be fined in the neighborhood of £10,000 for every day after the deadline until the company complies. With daily fines so extreme, businesses can find themselves in serious trouble after only a week ( £70,000), and a severely negligent business could find itself owing £310,000 or more.
These fines are intentionally high, and designed to be cost-prohibitive enough to boot reticent businesses into compliance. Indeed, the imposed fines are higher than even most healthy companies can readily afford. Because of this, Mr. Fowler stresses the importance of acting quickly, "especially for companies that are behind or ill-prepared."
Comprehensive Software Offers a Quick Fix
Software packages like OpenPeople, which Advanced Business Solutions provides, have seen a sharp upswing in popularity over the past year, as businesses seek payroll systems that offer completely automated pension auto-enrolment as part of a more comprehensive solutions system.
With these software solutions, employers can easily comply with the new laws via the payroll department. The OpenPeople software has added capabilities: it can create letters, manage documents, calculate refunds, provide employee assessments, and merge mail schedules with auto-enrollment deadlines so employees receive letters and information when they ought to.
Systems like OpenPeople promote and guarantee compliance all the time, and save businesses from paying the hefty fines associated with overlooking a deadline. Fowler says that his message to employers of all sizes is simple, "Give yourself time to prepare so that when your deadline comes, you're ready to go live."
SMEs will slowly opt in over the coming year, and as they do, more errors and problems are likely to come to light. To avoid costly oversights and mistakes, UK businesses should seek reliable companies that offer both pension auto-enrollment software and other modern Human Resources management solutions.
Brian Penny is a former business analyst at Bank of America turned whistleblower and freelance writer. He's a frequent contributor to Mainstreet, Lifehack, and HardcoreDroid and an affiliate of Manduka and Tazo. He documents his experiences working with Anonymous, practicing yoga, and fighting the banks on his blog.Suggest a correction