Our last blog on Pensions Auto-Enrolment was back in May 2015. For most of our clients the date from which they much Auto-Enrol is sometime in 2017. This is still a way away but it is something that needs to be planned and therefore we feel it is time to bring into focus again.
Our last blog tried to answer as many questions as possible on Auto-Enrolment. This one will focus on our recommendations for dealing with added administration that is coming our way.
Before we start it is worth reminding that there is the option to opt-out of Auto-Enrolment if you are Sole Director without employees in a Ltd Company. The instructions you need to opt-out can be found on this Pensions Regulator web-page.
If you are registering for Auto-Enrolment we see the ensuing admin as falling into two categories (both outlined in the previous blog):
- The Set up
- The Up-keep
The good news since we last wrote on the subject is that a some firms have been busy creating solutions for small businesses. We will set out these services and options below.
Before we get into the different options, it is worth considering what kind of service you want. Here are some of the key issues:
- Do you want someone to do it for you?
- Do you want someone to support you do to it?
- Do you want control over which pension you offer?
- Do you want integration to your bookkeeping system?
The Pension Providers
Many of the pension providers Aviva, People’s Pension, Smart Pensions, Budget Auto Enrolment (which is attached to Scottish Widows) provide an Auto-enrolment solution for small business. The essential idea here is that you are getting the pension provider themselves to help you with administration. At the start there will be employees to assess for Auto-Enrolment and letters to send to staff. Month to month there are payroll reports to be provided to the pension provider.
Most provide telephone support and some have excellent online systems to automate your admin (eg integrating employee details with letter templates etc).
They also have varying fee structures. Some fees are based on a monthly fixed subscription per employee, some on a % of the contributions made, some on a % of the pension put under management. Most require an upfront fee or between £100 an £250 to register.
If you going down this route remember that you are also choosing the Pension provider as well as a system to handle your administration.
Payroll Software Providers
Many of the Payroll software providers like Moneysoft and IRIS are also providing an integrated solution both in terms of posting the correct payroll data to your Pension provider and in generating admin letters to staff members.
Xero users will be pleased to know that the website tells us these features are ‘coming soon’.
However these solutions do not provide telephone support, so you are left to negotiate the options you have as an employer without an expert to guide you. Typically the cost is rolled into the cost of the payroll software itself instead of being charged as an add on.
There are also a few independent providers giving access to both an administrative system (letters, reporting templates etc) and technical guidance both on the process both telephone and online.
The best we have been able to find of these is My Auto Enrolment which appears to be an excellently put together package. What it won’t do is link your payroll to your pension provider. Cost here is £435+VAT.
Of course Crunchers and other payroll providers will be able to provide an outsourced service in terms of helping to set up the administration and then maintaining it as it continues. Like all outsourcing it will be impossible to escape all involvement since some choices will have to be made by the employer.