Are charities really prepared for auto enrolment?

Sep 3, 2015
Author: Simon Bladen
Simon is one of the firm's Audit Partners. Simon is responsible for looking after the firm’s legal, charitable and not-for-profit clients.
charity's structure

Are charities really prepared for auto enrolment?

The law on workplace pensions has changed and by 2017 every organisation in the UK, including charities, must automatically enrol their employees. The ability of pension providers to provide solutions is becoming a real issue of capacity and, if you do not start preparing early, the cost of auto enrolment (which is your legal obligation) will soon build up.

Thousands of charities are approaching their staging date

As an employer you are responsible for enrolling all eligible employees into your scheme (and contributing to it). There are thousands of charities approaching their staging date, as the below table (a rough estimate) shows:

Charities auto enrolment staging dates

Do not underestimate auto enrolment duties – are charities really prepared for auto enrolment?

Over 80% of charities will be approaching their staging date and will automatically enrol between now and April 2017. However, despite the national media coverage and breath of information available the concerns remain over whether or not charities are prepared, as Nigel Smith, Director of Hawsons Wealth Management, explains:

“I think some charities are underestimating how complex auto enrolment is and how much work is involved. There are a number of tasks you must complete before your staging date and we advise charities to start preparing nine months – ideally twelve – before this date.”

“Some charities that already have workplace pensions in place might assume that their existing scheme will meet minimum criteria, but this is not always the case. In fact, in the majority of cases it does not. The ability of pension providers to provide solutions is also becoming a real issue of capacity and if charities continue to delay their auto enrolment preparations they will likely be charged a more expensive service fee. Adding this cost to the potential fines charities could receive, at a minimum of £400, and the costs of auto enrolment can soon add up for those that wait.”

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Natasha Fathers, Director of HWM

Natasha Fathers

Director of Hawsons Wealth Management Limited, Sheffield