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Time to review the auto enrolment process

1 June 2017

Auto enrolment can hardly still be considered anything new for most businesses.

All but the very smallest are well into their journey and many are coming up to their first triennial re-enrolment. Nevertheless, an alarming number have still yet to take any steps to address the same old challenges they continue to face.

New benchmarking research published by Chase de Vere this May shows that the most common aspect of auto enrolment that employers find challenging is administration, singled out by 37% of respondents. Cost (23%) was second. As these grievances are basically the same ones that have been expressed since outset it is somewhat surprising that little has been done to tackle them.

The research shows that 43% of employers are still using a pre-existing pension scheme to fulfil their auto enrolment duties and that only 53% use their payroll systems to manage the required workforce assessment – meaning that data will have to be moved between multiple pools.

Sometimes switching pension provider can solve the monthly processing problems that are so widely experienced. More commonly, however, the answer will lie in obtaining a more modern integrated solution with payroll. These changes, when appropriate, can normally be delivered as part of an auto enrolment audit that Chase de Vere can do for its clients.

Nevertheless, so far the numbers of employers who have decided to review their pension arrangements ahead of their triennial re-enrolment has fallen well short of what the market had been expecting – although our survey does at least show that 73% of respondents plan to review their pension scheme in either 2017 or 2018.

One possible explanation for the lack of activity to date is the cessation of member-borne commission arrangements in April 2016. Many employers may be concerned that the costs involved with services that used to effectively be free may now be prohibitive.

In practice, however, the costs may be markedly less than they fear. Indeed, the greater efficiencies they realise by switching to more modern solutions could result in them enjoying a significant saving. We are typically finding that we are managing to speed up processes from taking several hours to being virtually instantaneous, therefore freeing up internal teams to focus on tasks that are instrumental to their core business.

Another possible explanation for the reluctance to carry out reviews is that many employers probably think that the technology they are using is much better than it actually is because they are not aware of how rapidly the market has moved on.

Our survey shows that 80% of employers are using some sort of software to manage their auto enrolment assessment. But, as 60% said that either administration or cost represented their greatest challenge, one can’t help wondering whether they are using the right technology or, if they are, whether it is working properly!

In addition to addressing these issues, a review of auto enrolment arrangements by an expert intermediary can look at the way employers are communicating with employees and whether they are achieving a suitable level of engagement. Even though auto enrolment is mandatory, employers should be seeking to maximise the return they get on the significant outlay involved.

Chase de Vere can arrange everything from seminars and workshops to podcasts and email campaigns to ensure that the value of what an employer is offering is fully appreciated by its workforce. If required, we can also arrange for employees to be able to access their pension details via an online portal at the click of a mouse and provide online tools to help them work out how much they need to be contributing to secure a comfortable retirement.

Additionally, we are able to benchmark pension arrangements against data from our own client bank and from other sources at intervals requested by our clients. This can ensure that what employers are offering isn’t out of kilter with competitors, and can therefore reduce the risk of employees wanting to leave to get a better deal elsewhere.       

If you would like further information on how Chase de Vere might be able to help you by conducting a review of your pension auto enrolment arrangements then please do not hesitate to contact Chase de Vere on 0345 300 6256 or complete this simple form and we’ll call you.