Key takeaways
Understand your auto-enrolment obligations clearly
Compliance failures can lead to costly penalties and reputational risk
Monitor workforce changes and eligibility regularly
Dynamic staffing requires ongoing checks to stay compliant
Robust processes and provider checks are essential
Strong governance ensures accuracy and timely pension contributions
Auto-enrolment in professional services
Avoiding common pitfalls
Auto-enrolment is a core legal obligation for UK employers, designed to ensure that workers are saving for retirement. For Professional Services firms, implementing these duties can be particularly challenging due to varied contract types, and the need for precise data management. Even minor errors can lead to financial penalties or reputational damage.
It is essential that employers fully understand their auto-enrolment duties and implement processes that are both compliant and operationally sound. Our pensions team is increasingly supporting clients in this sector who are encountering issues in areas such as postponement, employee opt-outs and enrolment timing. Below is a summary of the most common challenges and how we are helping firms navigate them.
1. Postponement
What is postponement?
Postponement allows employers to delay auto-enrolling eligible employees for up to three months from the date they become eligible. It is commonly used for new joiners during probationary periods or for short-term staff.
Common challenges
We frequently see postponement notices that do not meet legal requirements. In particular, many notices fail to inform employees of their right to opt in to the pension scheme during the postponement period. Firms also often miss the statutory six-week deadline for issuing the notice or fail to trigger enrolment correctly at the end of the postponement period.
How we support
We help employers ensure that postponement notices are issued on time and contain all required information. We recommend using standardised, legally compliant templates and integrating postponement tracking into onboarding workflows. Where there is uncertainty about whether postponement is appropriate, we provide tailored legal advice to support decision-making and reduce risk.
2. Opting out
What is opting out?
Eligible employees must be automatically enrolled into the company’s pension scheme. Once enrolled, they have a statutory right to opt out if they wish but a valid opt out can only take place after they have been auto-enrolled into the pension scheme.
Common challenges
Some employers mistakenly offer employees the option to opt in, rather than auto-enrolling them as required. We also see instances where employers unintentionally influence employees’ decisions to opt out, which may constitute unlawful inducement. In addition, invalid opt-out notices and delays in processing refunds are common issues that can lead to non-compliance.
How we support
We help employers ensure that all pension communications are neutral, accurate and legally compliant. Our team advises on how to structure messaging to avoid any suggestion that opting out could improve take-home pay or affect career progression. We also audit opt-out procedures, train HR teams on how to handle opt-out requests appropriately, and ensure that refunds are processed correctly and within the required timeframe.
3. Timing of enrolment
What is enrolment timing?
Auto-enrolment must take place as soon as an employee becomes eligible. At present, this means being aged between 22 and State Pension age and earning over £10,000 annually. Employers are responsible for assessing eligibility and enrolling employees without delay.
Common challenges
In Professional Services firms, eligibility assessments can be complicated by fluctuating earnings, international assignments and non-standard contracts. These factors often lead to delays or errors in identifying when an employee becomes eligible. Re-enrolment, which must occur every three years, is another area where firms may struggle to track and manage obligations effectively.
How we support
We assist employers in conducting regular eligibility assessments using accurate payroll data and clear criteria. Our team helps implement enrolment workflows that ensure timely action and reduce the risk of missed enrolments. We also provide legal guidance on managing re-enrolment cycles and support firms in identifying and resolving any gaps in compliance.
How we support professional services firms
Our pensions team provides practical, tailored support to help firms meet their auto-enrolment obligations confidently and efficiently. We assist with:
Compliance audits to identify and resolve process gaps
Drafting and reviewing postponement notices, opt-out communications and enrolment letters
Responding to queries on any aspect of auto-enrolment, including eligibility assessments, re-enrolment cycles, and scheme communications
Final thoughts
Auto-enrolment is not simply a compliance box to tick. It is an ongoing legal responsibility that requires careful planning, accurate data and clear communication. By addressing issues around postponement, opting out and enrolment timing, firms can avoid penalties, maintain compliance and support their employees in building long-term retirement savings.
If your firm is reviewing its auto-enrolment processes, we would be pleased to assist with a compliance review or support with any queries you may have.
