But have small and micro employers begun making plans to enroll their employees into a pension scheme? To answer this question, Mr Esslemont cited a survey carried out by the watchdog that found more than half of micro employers staging this year have not started making plans for auto-enrolment.
Another finding was that those in early stages of auto-enrolment preparation expect it to take longest, while those yet to start expect it to take the least time. Many will leave their preparations to the last minute.
Mr Esslemont said: “We would encourage you to make your [employer] clients aware that their duty is coming up and not to leave it [preparations] too late. That is partly because of the sheer volume of employers who are hitting their staging date for the first time.”
Not realising that temporary workers come within the scope of auto-enrolment and that all workers must be automatically enrolled before they can exercise their right to opt out are among the common compliance issues for employers, he said.
Failure to comply with auto-enrolment requirements could prove costly for firms, with escalating fines reaching as high as £10,000 a day for companies with 500 or more members of staff.
Mr Esslemont said Swindon Town Football Company was the first employer to be issued an escalating penalty notice, totalling £22,900, for failing to put eligible staff into a scheme, pay contributions or write to staff explaining how automatic enrolment affected them. The club also had to pay £13,613.39 in outstanding pension contributions.
He said: “Make sure your clients know what you are doing and make sure that you know what they are doing because we have had people who have gone non-compliant because they thought their adviser was doing it, but it had transpired they didn’t.”
Myron Jobson is features writer for Financial Adviser
Key points
Scores of industry delegates flocked to London on a cool September day for the latest instalment of FTAdviser’s Retirement Freedoms Forum.
The lifetime Isa is due to be introduced in April next year, yet the industry remains in the dark about some details.
Auto-enrolment appears to be a success.
