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How will Payroll Handle Auto Enrolment volumes ’17/18

The laws have changed. Pensions Auto-enrolment is a necessity now, and employers need to be prepared. Auto-enrolment is here.

Payroll providers and companies have been feeling the strain of the implementation during this last year, and now that the larger employers are enrolled, it is time to implement the legislation into the 1million plus smaller companies yet to be enrolled.

Pensions auto-enrolment became law several years ago but was rolled out in increments beginning with the very largest employers. The smallest firms were not required to come on board until 2017, but now they are all required to be compliant this year.

Of course, the top priority for those who are still selecting a scheme are the costs involved, but that should by no means be the only way they choose a suitable plan. They will also want to look into the standards, the communications and customer services that the companies offer as well as the real challenges of getting their payroll information into the format required by the pension providers.

Nearly three years ago the government warned that getting their people into a pension scheme was not necessarily going to be an easy task. They stated categorically that any company with less than six months until their staging date should already have a programme underway and be well enmeshed in the implementation of it.

The Department of Work and Pensions or the DWP states that more than 7 million people have now begun saving because of the success of the Auto Enrolment legislation. As a direct result of that more than 340 thousand companies and employers have declared themselves in compliance with the new law, but with more resources and dedicated staff hired to manage this process for larger businesses, how will the smaller companies with fewer resources, time and knowledge cope with the new legislation and implementation process?

As company sizes get smaller the number of employers, who maintain an in-house payroll operation also get smaller. Subsequently, auto-enrolment implementation and compliance will fall at the feet of the many payroll providers and accountancy firms that are providing existing payroll services. With more than 1 million companies to be enrolled this year, this will be big, time-consuming work for payroll providers and accountancy practices which beg the question, how will they cope?

Feeling the strain.
There are some significant fines applicable to clients if they stage late, so companies are working hard to fall ensure they are compliant as quickly as possible. The government has published numerous articles and publications, offering a broad range of ways for companies and their payroll companies to help, but the workload is still significant.

Payroll providers will feel the strain so to help handle the workloads they have recruited in additional resources, held numerous Auto-Enrolment training seminars and developed literature to help plan-ahead and provide regular lines of communication with companies to ensure they are ready for the change.

Typically, planning has involved:
Six months before the final staging date, checking with any existing pension providers about whether they will accept any or all employees, what the costs will be and what services they will provide. Relay that information back to the company in need of a pension solution.

Three to five months in advance, getting a commitment from the company as to which pension plan they will be using and begin to implement changes. Know what is necessary at every level to implement the plan on time.

One month ahead of time confirm that all information is in place to ensure timely compliance. Make last minute communications with both the pension plan provider and the company.

Going Forward
The single biggest problem that payroll companies are reporting in getting pension schemes set up in time for its clients has been a lack of communication concerning plans and information. It remains to be seen if the 1million plus companies will all enrol without a hiccup. What is clear is that communication is essential and payroll providers and accountancy practices alike are going to be extremely busy until every employer in the UK is successfully enrolled.

If you are a payroll provider or accountancy practice that requires additional payroll staffing support either on a temporary or permanent basis, please contact us. We have auto-enrolment specialists and skilled payroll administrators available to help, whatever the challenge. Email: info@jgarecruitment.com or call us on 01727 800 377

• How do you think payroll providers will cope in 2017/18 with 1million new companies to enrol?
• What problems did you face when you auto-enrolled?
• What advice would you give to a small employer that still needs to enrol for a smooth implementation?

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This article was written by Nick Day, Managing Director at JGA Recruitment – the leading Payroll, HR & Reward Recruitment Specialists.

If you are looking for expert talent in the fields of Payroll, HR or Reward, then please reach out for a 15 minute ignition call and I would be delighted to discuss how we can help.
Nick Day
Managing Director
James Gray Associates Ltd
Payroll, HR & Reward Specialist Recruiters
Email: nick@jgarecruitment.com
Tel: 01727 800 377
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