The Auto-Enrolment seesaw has shifted once again following the chancellor’s autumn statement. Oval’s Billy Johnson puts the changes in perspective and gives you the tips you need for 2012 and beyond.

The pensions time bomb has been ticking for decades and has been continually kicked into the long grass by successive governments as a thorny vote loser. The simple fact is that the demographics no longer work. MP Frank Field – often ignored thinker of the unthinkable – memorably said in 2002 that to keep pace with changes in life expectancy, a state pension would need retirement set at 74 and not the 65 defined in 1948.

Pension demographics: all change!
According to the United Nations, average life expectancy in the UK now stands at 79 years of age. Life expectancy for a UK male when the state pension was originally introduced in 1948 was just 66. As the saying goes, do the maths – our national pensions elastic is at critical overstretch.

Autumn Statement - the facts…
Hence the planned introduction of Auto-Enrolment as a way of forcing the workplace savings issues. But in the teeth of the worst economic upset since the 1930s – when growth is the overriding priority – the introduction of another complex payroll and operational cost with many moving parts has created a seriously problematic timing issue. Not least for the thousands of SMEs that make up the backbone of the UK’s private sector where 95% of people work in firms with less than 100 employees.

Larger businesses have the infrastructure and HR gearing to cope. However, the chancellor has recognised the operational, red tape and bottom line issues Auto-Enrolment will cause smaller firms and the result – welcome in many eyes – is deferment.

• Above 250 employees? Staging dates remain unchanged
• Between 50 and 249? Staging dates now deferred to run between April 2014 and April 2015
• 50 employees or fewer? Auto-Enrolment deferred to next parliamentary session post-May 2015
• The DWP will delay planned employer contributions increases (1% to 2%) until October 2017 with contributions of 3% only being phased in at 1 October 2018.

Our top tips for 2012 and beyond…
So - some breathing space. But Auto-Enrolment isn’t going away and regardless where you are on the staging spectrum, you need to start planning in 2012. Here are our top tips:

• Cash flow impact: start thinking about the cash flow impact and how best to accommodate it.
• Logistics: start thinking about the HR, payroll and administrative processes that you will need to follow to ensure Auto Enrolment compliance.
• Which scheme might suit you best? Extend or re-calibrate existing Defined Contribution schemes (DC) – or consider new schemes with new suppliers such as The National Employment Savings Trust pension - (NEST).
• Understand what your people need and want: spend some time getting to grips with the needs and wants of your people and you’ll be better placed to deliver the right workplace pension package.
• Get them thinking about the implications: recruiting people into a pension scheme can be tough – start getting it front of mind with your people sooner rather than later. It’ll make the process far smoother.

At Oval, we’re here to help: have the light-touch process for helping you navigate a changing Auto-Enrolment landscape painlessly and in good time.