Business feature: THE Department for Works & Pensions has informed ET Business about new legislation that will impact all employers from next year.
We contacted local IFAs Orchid Financial Services Ltd who confirmed the responsibilities and told us how they have teamed up with a local HR firm to offer a solution for clients to deal with the impending changes.
The Pensions Act has 2008 passed into law and lays the framework for:
- All employers being required to automatically enrol eligible employees into their pension scheme.
- All employers being required to pay pension contributions for any employees who join and stay in the pension scheme.
- The Pensions Regulator given new powers to police and enforce.
- Companies must amend existing workplace pension scheme to ensure they comply with the new laws.
- Employers who do not use their own pension scheme to comply will have to rely on a Government-built scheme - the National Employment Savings Trust (NEST) scheme.
Thornton Holmes, director at Orchid Financial Services, said: “There are two very basic choices; you can wait until 2012 and let someone else, who knows nothing about your business, impose a new pension scheme on you or you can set up your own scheme and retain complete control over its benefits and administration.
“This very complex legislation with its variable timescales for implementing to different sized businesses and multiple methods for valuing remuneration has the potential for causing real confusion. The fines for non compliance start at £50 per day rising to £10,000 per day for larger employers, companies will be barred from discouraging pension membership or carrying out recruitment that achieves the same result. If properly managed, we can greatly reduce the cost to the employer AND employee. But you need to take advice and you need to take it early.”
Due to the impact this legislation will have on businesses and their employee relations, it made sense for Orchid to team up with Click HR Ltd; one of its colleagues at BNI Synergy, one of the premier local networking groups for business.
Richard Hughes, director at Click HR Ltd, said : “Thornton, Rachel and the team at Orchid are a perfect fit with Click HR Ltd to provide a managed solution for business to cope with this complex change. We are experienced in providing support and guidance and managing change programmes to help businesses keep pace with the ever increasing legislation.”
Orchid Financial Services and Click HR Ltd have come together to provide a very powerful package of advice and ongoing support and have access to a free back office software system for firms to help employers deal with the issues of running a pension scheme, as well as keep up to date key employee information to help run and grow a small business. This package is known to cost in excess of £10,000 if bought on the open market. In addition, they can also provide a flexible employee rewards package to further help employers manage the stress of “auto enrolement”.
A pension is one of a range of workplace benefits that can be made available to an employee. Other benefits can include childcare vouchers, dental cover, Death in Service, Private Medical Insurance and many others. The system gives the employer a choice of additional benefits and Orchid and Click HR can help cost and plan for these. The software will also help the employer publish and maintain any scheme and HR data as well as being able to send desktop alerts to all staff and manage self service requests from staff for holidays or absence.
Thornton said: “Traditionally, this type of Flex Benefits System has only been taken up by large companies, but not anymore. The Flex Benefits System can be installed and run at a fraction of the traditional costs.”