Auto-enrolment insights

The latest thinking in pensions auto-enrolment

A promising direction in auto-enrolment compliance

The auto-enrolment saga continues for businesses with 30 or less employees.

It’s still worrying the number of companies who are not aware of the fines associated with auto-enrolment non-compliance, despite the marketing campaign explaining the importance of setting up a workplace pension and all the information available online on this matter.

On the other hand, it’s encouraging to learn that the number of compliance notices has decreased significantly from 15,073 issued between July-September 2016 to 6,296 issued between October-December 2016, according to the latest official auto-enrolment compliance and enforcement information.  This suggests that employers are, slowly, becoming more aware of the legislation and are willing to comply with their auto-enrolment duties.

Equally positive is the reduction on the number of unpaid contribution notices, dropping from 326 issued between July-September 2016 to 205 issued between October-December 2016.

It’s important to celebrate the wins, but we can’t ignore the fact that 2,919 fixed penalty notices were issued in 2016’s last quarter, which included a fine of £400 each as a result of non-compliance with either a statutory notice or particular employer duties.  This shows that we are still a long way to go when it comes to raising awareness of auto-enrolment.

For small businesses auto-enrolment non-compliance may have a detrimental impact, especially if they were to receive a penalty notice. Early planning and preparation for auto-enrolment is paramount.

As an online solution to auto-enrolment, we have the experience to help small businesses set up qualifying workplace pensions for their employees, quickly and cost-effectively.

To find out more information about Enrolsme, visit our website or simply call us on 020 7469 2865.

Enrolsme is a complete online automatic enrolment solution. Through the system, businesses can set up a qualifying and compliant pension scheme in a matter of hours.

Foster Denovo Enrolsme Ltd is an appointed representative of Foster Denovo Ltd.

Enrolsme is a non-advised process and other options are available which may be better suited to a small business. They may be more complex and they are not offered under this solution. Small businesses and other organisations who want to explore these options may wish to contact a financial adviser.

How prepared are small businesses for auto-enrolment?

We were impressed by the automatic enrolment infographic produced by The Financial Management Centre at the beginning of the year - it highlights some really interesting findings from a small business survey they carried out.

Great to see that almost two thirds (60 per cent) of small businesses are behind the legislation and think that automatic enrolment is a good idea. It's also positive to see a further 60 per cent planning to launch a new scheme from scratch to support their duties. So far, automatic enrolment has proved to be a success, but the question is whether this will continue as we progress into 2017 and beyond. Only time will tell.

When it comes to meeting their automatic enrolment duties, the survey found that 40 per cent of small businesses felt meeting the cost of auto-enrolment the biggest challenge, whereas more than a quarter felt the biggest challenge was the administration involved; two areas that have been flagged from the outset, and continue to be a concern for small business owners.

Disappointing to read the feedback in relation to the lack of support from The Pensions Regulator and that more than half of those surveyed stated they had not received any help.

And, perhaps most alarmingly, more than one third of small businesses are not aware of the fines associated with non-compliance. Businesses need to take heed - there will be fines, and whilst the fines seem low ticket initially, potentially for some, they can soon escalate. In many cases, these fines could be big enough to see companies, potentially, going out of business.

There is no denying the heavy workload of a small business owner or manager. Automatic enrolment creates yet another burden and more red tape. But it is here to stay, and there is a lot that needs to be understood and managed when embarking on the automatic enrolment journey.

In order to avoid penalties and fines, small business due to stage in the coming months need to start their planning and preparation now. Avoid fines and possible reputational damage and get one step ahead.
 
Enrolsme is a complete online automatic enrolment solution. Through the system, businesses can set up a qualifying and compliant pension scheme in a matter of hours.

Foster Denovo Enrolsme Ltd is an appointed representative of Foster Denovo Ltd.
Enrolsme is a non-advised process and other options are available which may be better suited to a small business. They may be more complex and they are not offered under this solution. Small businesses and other organisations who want to explore these options may wish to contact a financial adviser.

WHY FREE ISN'T ALWAYS BEST FOR BUSINESS

Matthew Mitten, director of Enrolsme looks at the options when it comes to complying with the automatic enrolment legislation.  www.enrolsme.com


The Regulator has spoken. Last month it stated in marketing communications that it 'will be writing to over 95,000 small and micro employers with less than six months to go until their staging date to tell them it’s time to choose a pension scheme'.


Time is ticking, and many (although sadly not all), will be putting their plans in place to make sure they comply with the legislation. There are a number of options open to them. NEST, the workplace pension established by the government, is one of them. It is free for employers and easy to set up, and we are seeing large numbers of  small businesses choosing this route. However, be aware that the less something costs the more there is for the employer to do. Automatic enrolment is not just about choosing a pension.  I worry that people selecting, say NEST and other ‘free’ schemes, think that they’ve done chosen their pension and they are compliant.  But for some, without the correct level of guidance and support they could end up falling foul of the legislation.


Equally, employers may fail to recognise there are other options available to them. I'd expect they see NEST as doing the complete job - taking care of all reporting, administration and employee communication. Sadly that isn't the case -  support levels are minimal for the employer.


NEST won't advise on the ongoing reporting that employers are required to do, and they won't assist with payroll activity. Currently it provides minimal telephone support, and there is concern over resourcing as increasing numbers of employers reach their staging dates this year. NEST describes itself as a digital pension provider; it prefers not to talk to people, but to deal with everything online. This is understandable as they have to cope with huge volumes of inbound activity, but the experience some customers will receive may not be what they were hoping for.


This is a critical time for employers and they need more than just a pension wrapper. They need support and guidance and to make sure they are meeting their automatic enrolment obligations in the best way possible. It is important that businesses ensure they look after and support their staff, and their business, and for these reasons they need to make the right decisions when it comes to selecting their pension scheme and support needed.


Some employers will want access to guidance with their auto-enrolment journey but may not know where to go to and who to talk to.  Yet there are a number of companies out there who can help – but employers will have to be prepared to pay a fee for this support.  And if it brings peace of mind and step-by-step help for them, it is, in my opinion, a price worth paying.  


Enrolsme (www.enrolsme.com) provides a three-step guided process, giving businesses comprehensive guidance on how to design and set up a workplace pension scheme; ensuring they meet their obligations and providing all the payroll processes they need to follow.


We have partnered with Standard Life and The People's Pension to ensure we are offering customers a genuine choice whilst not compromising on quality.


Matt Mitten
Enrolsme Director

Connect with me on
LinkedIn

Foster Denovo Enrolsme Ltd is an appointed representative of Foster Denovo Ltd
Enrolsme is a non-advised process and other options are available which may be better suited to a small business. They may be more complex and they are not offered under this solution. Small businesses who want to explore these options may wish to contact a financial advise








Removing the risk with pensions auto-enrolment

The threat of peoples' pensions savings being at risk is something we have been keeping accountancy firms informed of for some time now. We want to ensure they encourage their clients to take as little risk as possible when it comes to selecting the preferred provider for their workplace pensions.


A large number of master trusts have been created over recent years - in anticipation of the increased demand in relation to auto-enrolment. Where some of the larger providers have realised the margins are very small and therefore begun to charge a fee, other small providers are still offering it for 'free'. Naturally, some employers are tempted by these offers, only to potentially, get their fingers burned further down the line. It is hard to imagine how a small master trust can make the long-term financial model stack up when the larger providers who already have scale, can’t do it.

If these smaller schemes end up pulling out of the market, or going bust, it will be bad news for everyone – the individuals affected, the employer, their accountant and the industry. News like this - understandably - creates reputational damage for the financial services profession.  Right now, we need to be building up peoples' confidence and encouraging appropriate investment.

The message needs to get through that: 'cheap isn't always best'. Despite the industry being heavily regulated, master trusts don’t protect individuals to the same extent as, contract based schemes, like a personal pension. Employers need to do their research, and look towards a provider that has a lot of experience in running pensions - ultimately those with a track record are more likely to be here in the long-term.

And when it comes to investing in the future(s) of their staff, employers should be looking to minimise any potential risks as much as possible.

Only a few weeks ago, I made reference to the fact that we read about a lot of advice firms setting up small master trusts to support their clients (and new ones) through automatic enrolment. At the time I stated that we would struggle to see them all achieve the scale needed to make them work. So if they decide to pull out of the market, where will this leave those who invested?

I strongly suspect we'll see consolidation of the mastertrust market during 2016 and 2017 and a number deciding to pull out all together.

Matt Mitten
Enrolsme Director

Connect with me on LinkedIn

Foster Denovo Enrolsme Ltd is an appointed representative of Foster Denovo Ltd
Enrolsme is a non-advised process and other options are available which may be better suited to a small business. They may be more complex and they are not offered under this solution. Small businesses who want to explore these options may wish to contact a financial adviser.


Auto-enrolment compliance notices rise

It seems that (certain) employers are failing to comply with their pension auto-enrolment duties, and - as a result - TPR has witnessed a big increase in the number of notices and fines it has had to issue.


A total of 4,818 compliance notices have been issued to firms since auto-enrolment started in autumn 2012 - but more than half of these, at 2,596, were issued between October and December 2015 alone.

Whether business owner/managers like it or not, auto-enrolment is the law, and they need to take notice of the warnings. The fines may seem insignificant in the early stages, but - over time - they will grow, and could have a real impact on a business.

Businesses (and their accountants) need to act now, and the majority have. But - for the minority - they can no longer 'bury their heads in the sand'.

Matt Mitten
Enrolsme Director

Connect with me on LinkedIn

Foster Denovo Enrolsme Ltd is an appointed representative of Foster Denovo Ltd

Enrolsme is a non-advised process and other options are available which may be better suited to a small business. They may be more complex and they are not offered under this solution. Small businesses who want to explore these options may wish to contact a financial adviser.

Accountants: Now is your time to shine

A report by the Committee of Public Accounts has stated that by the end of August 2015, 58,000 employers had enrolled 5.4 million people into new workplace pensions (1). All positive stuff, but the real test is to come in 2016, when 1.8 small business employers will have to automatically enrol their staff into a pension.


The Federation of Small Businesses (FSB) has commented: "While small businesses are aware of automatic enrolment, awareness is not the same as understanding..."

We have always said that business owner/managers will turn to their accountant as the first port of call when it comes to guidance on automatic enrolment. In view of that, shouldn't accountants be looking to inform their clients, and to give them as much information as possible when it comes to automatic enrolment? Being better informed will help the business to make the best decision(s) about how best to comply with the legislation.

Time is ticking away - not only for small businesses, but for their accountants too; now is the perfect 'time to shine', and to support clients to the best of their ability.

Enrolsme works with a large number of accountancy firms, supporting their clients through automatic enrolment process. We are always happy to take enquiries from new firms unsure of how and where they can help.

Matt Mitten
Enrolsme Director

Connect with me on LinkedIn

Foster Denovo Enrolsme Ltd is an appointed representative of Foster Denovo Ltd
Enrolsme is a non-advised process and other options are available which may be better suited to a small business. They may be more complex and they are not offered under this solution. Small businesses who want to explore these options may wish to contact a financial adviser.


(1) http://www.parliament.uk/business/committees/committees-a-z/commons-select/public-accounts-committee/news-parliament-2015/automatic-enrolment-workplace-pensions-report-published-15-16/

How prepared is the accountancy sector for auto-enrolment?

We regularly meet with accountancy businesses of varying sizes and each with very different sets of clients on their books.


It still really amazes me the lack of awareness when it comes to accountants and the automatic enrolment legislation. Most have certainly heard about it, but few - to my knowledge - seem to be promoting it to their clients, and flagging the approaching staging deadlines.

Reports have appeared highlighting that 1.8m small businesses will need to set up a workplace pension for their employeers over the next three years, as opposed to the originally forecast amount of 1.3m (1).

With this in mind, shouldn't a level of responsibility rest with the accountant to ensure their clients are as well prepared as possible? I'd imagine - given these large numbers - that most companies will have a few dozen clients that need to set up a workplace pension during this year and into 2017. These businesses should be preparing as soon as possible - to avoid possible errors, lack of choice in pension provider and fines from the Pensions Regulator.

In a piece of research (2) we conducted last year, we uncovered that 42% of small businesses plan to turn to either their accountant or book-keeper for guidance when it comes to auto-enrol their employees into a pension scheme. Accountants have to appreciate that they are and will continue to be the first point of contact for their clients when it comes to auto-enrolment compliance.

It's highly likely that many (but not all) small business owner/managers have read about automatic enrolment in some detail, and - potentially - to a level that they understand the legislation more than their accountant. But, isn't this a chance for accountants to really add value? And to pass on the knowledge they have learned? No service professional wants to be caught out, or to be seen as being on the 'back foot'. I'd argue that workplace pensions auto-enrolment presents a real opportunity to develop and build on relationships with existing clients. And, for those offering a payroll solution, the chance to attract potential new clients.

Matt Mitten
Enrolsme Director

Connect with me on LinkedIn

(1) http://www.theactuary.com/news/2015/07/tprs-underestimation-of-smes-preparing-for-auto-enrolment-will-cause-unprecedented-rush/

(2) Surveys conducted by Censuswide on behalf of Enrolsme between 27 February 2015 and 05 March 2015.  The employers’ survey was conducted with 200 employers and 50 charities in businesses employing 1-50 people with no pension in place. The employee survey was conducted with 250 employees in businesses employing 1-50 people who offer no workplace pension.


Foster Denovo Enrolsme Ltd is an appointed representative of Foster Denovo Ltd

Enrolsme is a non-advised process and other options are available which may be better suited to a small business. They may be more complex and they are not offered under this solution. Small businesses who want to explore these options may wish to contact a financial adviser.



Workplace pensions - 'no tidal wave'

The role of the accountant
So far, experience has shown a significant number of accountants are getting involved when it comes to pensions auto-enrolment. Many don't see it as being lucrative, and - so far - it just hasn't been top-of-mind for the average accountant.

Most have only had one or two clients stage but this has often been managed by an IFA or they have in-house expertise. However, with one third of their client bank likely to be staging in 2016, accountants are now looking to have a more definitive process in place.



No 'tidal wave'
Almost 100,000 companies need to meet their duties in the first quarter of the year, and The Pensions Regulator (TPR) won't know for certain about those small businesses that failed to comply until around five months later - so well into the summer months.

I don't expect to see a 'tidal wave' of enquiries and employers setting up workplace pensions in the early part of 2016, as many have predicted. I suspect many will ignore their duties and fail to get advice. Despite the efforts of TPR and their accountant sending them letters, most companies will ignore this correspondence and it won’t be until five months later they get a reminder to comply from the regulator and the threat of a fine. Hence, I can see a large number of the February and March stagers coming online later in the year around July/August time - when the fines are due to hit.

Business owners 'switching off'
The threat of a £400 fine may have a big impact on cash flow for some micro businesses; for others it’s no more than a long lunch! The threat of the daily fine will definitely get people’s attention, but is it enough to get them to comply with auto-enrolment on time? For many I am guessing it won’t be.

Much of the advertising (of Workie – who I like by the way) is on TV. How many small business owners have time to watch TV? Any TV they do watch tends to be pre-recorded and so they fast forward the adverts. I hope Workie starts playing a bigger role online and through other media than just TV in order to appeal to this audience.

Master trusts - consolidation
Last year, we read about a lot of advice companies setting up small master trusts to support their clients (and new ones) through auto-enrolment. But, I struggle to see them achieving scale and making it work? When they decide to pull out of the market, where will this leave those who invested? I strongly suspect we'll see consolidation during 2016.

Get ahead with auto-enrolment

- Start planning now. Do as much as you can in advance of your staging date. You can set up your workplace pension way in advance without having to make any contributions until the date you need to comply.
- This gives you enough time to get your payroll data ready, this bit is often the tricky part.
- Setting up a workplace pension can be straightforward if you have simple circumstances. But there is still quite a lot of new language to get your head around. If you’re a bit more complicated talk to people, there is plenty of information and help available.


Matt Mitten
Enrolsme Director

Connect with me on LinkedIn

Foster Denovo Enrolsme Ltd is an appointed representative of Foster Denovo Ltd

Enrolsme is a non-advised process and other options are available which may be better suited to a small business. They may be more complex and they are not offered under this solution. Small businesses who want to explore these options may wish to contact a financial adviser.

5 tips to help your clients through their auto-enrolment journey

The clock is ticking for employers with fewer than 30 members of staff, as they will soon have to auto-enrol their employees into a workplace pension scheme.

The government plan is to ensure that employers of all sizes will have a workplace pension in place by the end of 2017 and therefore be compliant with the auto-enrolment legislation.

In a research we conducted last year, we uncovered that 42% of companies plan to turn to either their accountant or bookkeeper for guidance when it comes to workplace pensions.


In order to help you support your clients through auto-enrolment compliance and make this process as smooth as possible, we’ve put together the following tips:

Be proactive

Research and understand in more detail what the requirements are for your small business clients. You can then identify the different ways you could help and suggest options that suit their business. Many will be relying on you to run their new payroll processes for them. Remember, it’s not just about setting up a pension scheme, it is also how payroll and the pension scheme will connect.

Get organised

If you know your clients’ PAYE number you can find out their staging date by visiting the Pensions Regulator’s website.

Create a spreadsheet containing all your clients and their staging dates to ensure they won’t miss their deadlines. If you want to save time, simply download this free staging date planner. This will enable you to easily see the volume of clients that lies ahead. It shows you where the spikes are, helping you spread resource and time effectively.

Educate your clients

Start proactive conversations on auto-enrolment with your clients and discover how well they understand the legislation. Explain the importance of setting up a workplace pension and the consequences of non-compliance.

Take action

Your clients will need to start putting a plan in place. Once they know their staging date, they will have to assess their workforce, communicate the changes to their employees, automatically enrol their eligible employees, register with The Pensions Regulator and start contributing into their employees’ pensions.

How can you help?

We have created a quick and easy way for your clients to set up a workplace pension with either Standard Life or The People’s Pension. We do the pension set up and you support your client, without breaking any rules. Download our Toolkit to understand how you can get your clients compliant in only a few clicks.

If you have any questions, please contact our friendly team at hello@enrolsme.com or call 0843 459 3099*.

Matt Mitten
Enrolsme Director

Connect with me on LinkedIn

Foster Denovo Enrolsme Ltd is an appointed representative of Foster Denovo Ltd

Enrolsme is a non-advised process and other options are available which may be better suited to a small business. They may be more complex and they are not offered under this solution. Small businesses who want to explore these options may wish to contact a financial adviser.

* Calls cost 7p per minute plus your telephone company’s standard network charge.

Are small businesses still confused about workplace pensions?

The Federation of Small Businesses has revealed concerning, but unsurprising, statistics on small businesses and their auto-enrolment duties.


More than three quarters of respondents believe it will put too much pressure on their business, and there is still a lack of clarity as to their responsibilities. The statistics that come from these surveys just don't seem to provide positive reading!

Almost 100,000 companies need to meet their duties in the first quarter of the year, but I don't expect we will see a 'tidal wave' of enquiries and companies complying in the early part of 2016, as many have predicted. I suspect many will ignore their duties and fail to get advice. I can see a large number of the February and March stagers coming online later in the year around July/August time - when potential fines are due to hit. The threat of the daily fine will definitely get people’s attention, but is it enough to get them to do it on time? For many I am guessing it won’t be.

Much of the advertising (of Workie) is on TV. How many small business owners have time to watch TV? Any TV they do watch tends to be pre-recorded and so they fast forward the adverts. I hope Workie starts playing a bigger role online and through other media than just TV in order to appeal to the business owners.

Matt Mitten
Enrolsme Director

Connect with me on LinkedIn

Foster Denovo Enrolsme Ltd is an appointed representative of Foster Denovo Ltd