The new employer duties resulting from workplace pensions reform are with us to stay.
Much has been written about these duties which are to:
- assess and segment the workforce into the three categories of worker
- automatically enrol eligible jobholders into a pension scheme and make contributions
- arrange pension scheme membership for those who want to opt in
- ensure the pension scheme qualifies and register it with the Pensions Regulator
- provide workers with information
- keep records for up to 6 years.
These are considered, at least on the surface, to be relatively straightforward, but what about the practicalities of compliance? What about the daily and weekly issues that you will experience and some of the more complex situations you may encounter?
The duties require employers to keep track of member opt outs and re-enrol these individuals every three years. They will have to keep track of any changes in an individual's circumstances due to a change in age or earnings and carry out the required duties when someone moves from entitled to non eligible or eligible jobholder status. The provision of information requirements may differ with each category of member daily or weekly.
What of postponement? The option for an employer to defer assessment and the employee's right to override this postponement and join earlier? How do you track and manage all of this, how do you find time for your day job and ensure you don't become a full time auto-enrolment manager?
Technology can help and an all encompassing solution will provide ongoing administrative support and functionality to monitor the workforce and comply with all the new duties and requirements.
Technology is really the only way to ensure that an employer doesn't miss a category change or fail to meet one of its other duties. Technology will also ensure that processes are in place to guarantee that employers will remain compliant, provide clear communication and have access to an audit trail should the Pension Regulator come knocking on the door.
Technology is available from a number of different sources.
- Payroll suppliers
- Pension providers
- Flexible benefit suppliers and hub technology suppliers.
The choice of technology provider will depend on an employer's circumstances. It will take account of cost constraints and will range from the purchase of a simple 'off the shelf' solution to fully outsourcing the administration and all worker contact. Whichever supplier is chosen, it is the employer's responsibility to ensure that all of the necessary duties are satisfied whether or not those duties are outsourced.
We, at Smith & Williamson, are well placed to take you through the myriad of options and choices. Our overall aim is to ensure that as an employer you are compliant, communicate effectively, administer effectively and efficiently and that your management team's time is spent on your core business and not administering your auto-enrolment pension scheme.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.