I was asked to call a business owner recently and explain the implications of auto enrolment to his business. The opportunity to call this client came from an accountant we’d worked with previously and had recently read our white paper we had sent to him.
I called this business owner, spent some time understanding a little more about his business and provided him with an overview on how the rules will impact him, his employees and his business.
Now, I’m a firm believer that if I’m trying to explain something and the individual I’m explaining the concept to doesn’t understand what I’m trying to explain, it’s my responsibility to ensure that I need to communicate the concept in a more effective way.
During this call I obviously failed in my effort to communicate the impact of auto enrolment and definitely need to do better next time! Let me explain what happened….
After I’d explained how auto enrolment will impact this individuals business. The business owner said..
“Thanks for explaining that Chris.” he started “The thing is….I’ve seen it all before.”
“I remember a couple of years ago when stakeholder pensions came in. We just set up a shell, everybody decided not to join and we carried on as usual.”
“I know you told me that these rules are already law, the obligations as an employer are mine, and the penalties are high, ….but I don’t think the rules will actually impact me and my business.”
“I think that these rules will fall by the wayside and I can then get on with running my business.”
“I appreciate your opinion” I said “But let’s assume that auto enrolment does come into play, and due to your thinking ‘it’ll never happen’ you haven’t prepared sufficiently enough and therefore incur fines…..are you prepared to take that risk?”
“Ok. Thanks for your time. If there’s anything else you need, let me know.”
“Thanks, Chris. You’ve been really helpful…bye.”
Now on this occasion, I blame myself for not being able to communicate the importance of preparing for auto enrolment. However it’s not a mistake I’m going to make in this blog entry…
Let’s be clear
Auto Enrolment is happening.
If you think these rules are going to be ‘as effective as stakeholder pensions’ you don’t understand enough about the rules.
The law has been in place since 2008 and large employers have already had to comply.
If as an employer you still think it’s not going to impact your business….you’re wrong. It will.
If you think that a concept that semi-compulsory workplace pensions can’t work. Take a look at the australian model.
If you think that you can deal with it a few weeks before the date you need to comply…you don’t understand what you need to do. I’d suggest you need to read , in full, the guides on this page.
As an employer, to choose to ignore auto enrolment is like choosing to jump into shark infested waters with a cut leg.
You might not suffer. But it’s far far more likely you will….