So, we’ve looked at the Auto Enrolment Past, delved into what’s happening today and now it’s important to look at what’s going to happen in the near future of Auto Enrolment.

So let’s jump back into our Delorean (without a shadow of a doubt the 2nd coolest time machine behind the Tardis) and venture forward in time, to….

THE FUTURE OF AUTO ENROLMENT!*

* Ok, that was a bit dramatic but you get the idea.

Now, whilst I haven’t got a crystal ball we’ve been spending a lot of time recently speaking to smaller employers together with looking at the trends we’ve seen in large and medium sized companies and found some interesting stuff.

Firstly, we’ve found that many of the employers will approach their accountant or payroll provider before they come and see a financial planner or a specialist in this area.

This makes sense for many employers who rightfully see this as a business issue and not a pension issue but it also means that we’ve recently focused on propositions we can use to help these professionals working with smaller clients to solve these problems efficiently and in a way which provides great value (more to come on this very soon).

However we’re also seeing instances of SME employers who are taking a totally different approach. Instead of seeing the new regulation as a cost to their business they are seeing the duties they now need to comply with as an opportunity to really look into  their business and provide market leading benefits in order to retain their best people.

Whilst this is more expensive than a ‘plug and play’ automatic enrolment solution the firms who want to consult want to not only be seen as providing great benefits but also want to reward and retain their teams in the most efficient way possible.On many occasions this is through additional benefits including pensions, childcare vouchers and private healthcare.

Also, whilst no one actually knows what the gap between the opt out rates employers expect and the actual opt out rates will be if the trend continues into the smaller end of the SME market you’ll find that employers will assume opt out’s are high when in actual fact the reality far smaller percentages will be the norm.

That’s why it’s important the SME’s need to start to plan as early as possible.

Not only to provide enough time to meet the obligations but also to ensure they’ve enough cash in the bank to cover both the pension contributions and any additional costs they might occur in the automatic enrolment process.

The other large unknown is capacity.

Whilst I’m going to step short of making specific predictions we’re already seeing capacity issues in the market. This has resulted in pension providers declining to take on schemes (which for a variety of reasons isn’t the hugest issue in the world) but also employers who are looking for specific advice and support being unable to get it.

Over the course of the next few years there is an auto enrolment avalanche. An avalanche of gigantic proportions as the ever single remaining employer and employee are nudged into this new system.

So, everything we’ve discussed points to one thing. Whilst the future is unknown

One thing is as clear as day…

All SME business (or any professional service who helps employers of this type) should start to prepare for the automatic enrolment avalanche….

….and soon.