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Auto Enrolment – An Update

We are now seeing a noticeable increase in the number of clients reaching their “Staging Date” and having to automatically enrol their employees in a pension scheme.

 

Joanne Hagreen, robinson+co’s Auto Enrolment specialist, unfortunately confirms what we suspected back in 2013 when we started to look at Auto Enrolment:

 

“The process of auto enrolling is not straightforward and does involve a considerable time investment to ensure that everyone – you, your employees and the pension provider - has the information they need when they need it. Luckily, things do settle down after the first couple of payroll runs including automatic enrolment, but you still need to be on your toes as there seems to be a few software glitches at both ends of the process, and no matter who you are using.”

 

However, Joanne can make the job easier – she has experience with different pension providers as well as different payroll software, including Sage and Quickbooks, and is quick to notice the quirks and glitches within each system – which could save you valuable time.

 

In addition she has access to the prescribed letters that an employer must send to their employees. These are extensive in scope and being able to access them quickly and efficiently can, again, save you time. Joanne has built up a bank of letters covering all possibilities.

 

One thing to be aware of is that some pension providers do not take the first contribution(s) until the 6 week “opting out” period is finished. This is clearly to avoid having to repay any amounts to employees, but it does mean that the employer has to watch for a large direct debit, and ensure that the cash is available!

 

Equally, it has become clear that the number of people opting out is much less than expected. At the moment the contribution level is 1% of salary only, so the opt outs may start in earnest after 1 October 2018 when the contribution level will be 5%.

 

Frighteningly, whilst many employers have not yet even reached their Staging Date, some are not far from the 3 year anniversary when employees who have opted out, have to be automatically enrolled again. This is going to be annoying for the employer and the employee, both of whom have to jump through various hoops in order to restore the status quo!

 

Finally, NOW Pensions are planning on enhancing their online services by introducing online chats and screen sharing to support employers. However, this will - obviously - come at an extra cost to the employer! NOW will be charging an extra £40 per month for firms staging from 2016 onwards. This is most definitely a factor to consider when choosing a pension scheme as Auto Enrolment is becoming increasingly costly!

 

Joanne can be contacted on 01900 603623 or joannehagreen@robinsonco.co.uk

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