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Solving the automatic enrolment administration problem

30 June 2017

Sometimes the solution to a problem can be a little closer to home than is generally realised.

This certainly seems to be the case with pensions administration, which recent Chase de Vere research has found is regarded by employers as their biggest automatic enrolment headache.

The research has found that 37% of employers found administration to be the key challenge in meeting their automatic enrolment duties. But it also highlighted that only 53% use their payroll software for automatic enrolment management and that as few as 11% have looked to their accountant or payroll provider for help in this area. 

It doesn’t take a genius to suspect that those employers who are handling these administration functions manually may constitute the bulk of the 37% who find administration the key challenge!  

One of the main problems here is that at the outset of automatic enrolment the option of using payroll for this purpose wasn’t available via many providers. 80% of survey respondents had their staging dates between two and four years ago but things have moved on rapidly since then and most modern payroll systems now include the capability.

Additionally, some employers have in fact always had a payroll system capable of handling automatic enrolment administration but have simply not been aware of this. The fact that the survey shows that over 50% of employers didn’t use an adviser during implementation could go some way towards explaining the situation.

Either way, the route forward for those experiencing administration problems is to have an automatic enrolment review. Chase de Vere will be able to tell you exactly what your system can and can’t do and, if a more modern one is considered necessary, can help select the most appropriate. 

Another potential solution is for employers to ask their payroll provider or accountant to handle the administration on their behalf.  However, it seems that not all such practitioners are as geared to helping with such outsourcing as one might have supposed.   

A survey carried out by Accountancy Age magazine in September 2016 found that four in ten of its audience said their practice’s costs had significantly increased in preparing for automatic enrolment. The main culprits were cited as processing, staff and administration time, client preparation and irrecoverable time providing advice. Only 57% of practices had actually implemented a pricing structure around automatic enrolment implementation and advice.

Things may have moved forward a little during the past few months but it seems clear that many accountants and payroll providers need to become more streamlined to operate profitably. Fortunately, Chase de Vere has devised a format that enables them to do exactly that.   

Our AE Professional solution, which already works in conjunction with nearly 100 payroll providers and accountants, can select suitable providers and remove all the ‘grunt work’ from the process – handling everything from the set-up and streamlining of the scheme to regulatory and compliance work and ongoing governance.

By using our expertise to take all such time-consuming mundanities off accountants’ and payroll providers’ desks we can free up their time and enable them to operate much more efficiently.   

This solution has been meeting with rapidly growing popularity, and we expect the pattern to continue to accelerate. In particular, the need for it should become even more marked this October when automatic enrolment becomes a ‘day one’ duty for newborn employers – which are expected at a rate of 200,000 a year from now onwards. Much of this burden is clearly going to fall on accountants and payroll providers.

We are confident that AE Professional will help raise the proportion of employers who look to their accountant or payroll provider for help with automatic enrolment management to well above the current 11%, and we also expect a significant increase in demand for automatic enrolment reviews generally – meaning we can help clients achieve far greater efficiencies with in-house administration.

Our research shows that over 50% of employers indicated that they planned to have such a review in 2017 and that this figure rises to over 70% in the next two years.  

If you would like to find out more about AE Professional or about how Chase de Vere can conduct an automatic enrolment review then please do not hesitate to contact Chase de Vere on 0345 300 6256 or complete this simple form and we’ll call you.