7 tips for auto enrolment from companies who have already staged

IRIS has already helped 7,300 businesses to stage for automatic enrolment, assessing over 600,700 employees in the process. This useful guide contains 7 tips from these businesses to help you prepare for automatic enrolment.

Background to automatic enrolment

Workplace Pension ReformPeople are living longer, with healthier lifestyles; and as a result the ratio between the workforce and those at a pensionable age is decreasing. People are also planning and saving less for their retirement.

Before auto enrolment began, the government estimated that around seven million people are not saving enough to give them the retirement income they want or expect.

The Pensions Act 2008 established new duties on employers aimed at tackling these issues in the shape of the Workplace Pension Reform which required businesses to take a minimum1% contribution from their employees pay (providing they met the requirements) and then match this with their own contribution. This would result in the employee becoming ‘automatically enrolled’ into a pension scheme to help them save for their retirement.

Call 0844 815 5677 or visit iris.co.uk/autoenrolment to see how we can help you

What this means for small businessesBack in October 2015, The Department for Work and Pensions launched Workie, their mascot for auto enrolment.

With an estimated 570,000 small businesses staging between April 2016 and April 2017, Workie’s objective of raising awareness of auto enrolment is

more important than ever. The Pensions Regulator have reported a spike in non-compliance fines since auto enrolment began for small businesses, so ensuring that auto enrolment awareness is as high as possible is a key objective for all stakeholder of the workplace pension reforms.

So far, auto enrolment has reached 100,000 businesses and enrolled 6 million people into a workplace pension.

The 7 tips to help auto enrolment compliance

We’ve gathered together the 7 top tips from companies who have already staged. These tips should give smaller businesses a better idea of what you need to do to properly prepare for auto enrolment.

The Pensions Regulator estimates that there are around 570,000 businesses staging for auto enrolment in the 12 months between April 2016 and April 2017; if you are one of them, then these tips should help you have a smooth and problem-free journey to auto enrolment compliance.

Call 0844 815 5677 or visit iris.co.uk/autoenrolment to see how we can help you

The 7 tips

1. “Prepare at least 12 months before your staging date”

2. “Compliance isn’t optional”

3. “Keep things simple”

4. “Payroll is central to auto enrolment success”

5. “Test, test, test”

6. “Work with trusted advisors”

7. “Make sure you get trained as early as possible”

1. “Prepare at least 12 months before your staging date”

If you are worrying about automatic enrolment you’re not alone - over 570,000 businesses are due to stage between April 2016 and April 2017, and over 100,000 having already staged. With so many tasks that must be completed to achieve automatic enrolment compliance it is important to give yourself time to prepare properly. This way you can avoid rushed decisions that are later regretted. The Pensions Regulator recommends you start to prepare 12 months before your staging date. You can use the below timeline from The Pensions Regulator as a basis for your preparation:

Call IRIS on 0843 357 1802 or Earnie on 0844 815 5677 Visit iris.co.uk/autoenrolment

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2) “Compliance isn’t optional”

Unfortunately, some businesses that have already staged for automatic enrolment have learned the hard way that The Pensions Regulator is taking non-compliance very seriously and will fine businesses who don’t meet their obligations.

We recently spoke with The Pensions Regulator who explained that their position is simply to educate employers on auto enrolment, and only use their powers as a last resort. This doesn’t mean that they won’t step in when necessary to. One of the more famous occasions of The Pensions Regulator having to step in to combat non-compliance came from Dunelm in 2012.

As of January 2016, 1,594 fixed penalty notices given out to non-complying businesses; 1,013 of these were issued between October and December 2015. Additionally, 58 information notices have been issued, and 4,818 compliance warning notices handed out to businesses likely to miss their staging date. This spike in fines over recent months shows that smaller businesses are particularly at risk financially if they fail to comply.

As well as the fixed fine of £400, daily fines can also be issued:

Number of employees Daily Fine

500 + £10,000

250 - 499 £5,000

50 - 249 £2,500

5 - 49 £500

1 - 4 £50

Key points:

• You must be ready, by your staging date, to automatically enrol eligible employees onto a pension scheme.

• You must give details of how you have complied with automatic enrolment by completing a Declaration of Compliance. The deadline for completion of this is 5 months after your staging date.

Call IRIS on 0843 357 1802 or Earnie on 0844 815 5677 Visit iris.co.uk/autoenrolment

Automatic enrolment is complex and there is lots of legislation governing what businesses must do and aren’t allowed to do. This doesn’t mean, however, that you need a complex process for handling automatic enrolment. In fact businesses who have already staged for automatic enrolment agree that the key to success is keeping your processes as simple as possible.

This means having a complete solution that will manage all of your key tasks automatically, rather than several different systems which involve human intervention (leading to human error). Trying to handle things manually or with numerous different systems can add as much as 3.5 days per month to your workload!

Having the right software in place is vital and The Pensions Regulator recommends asking providers whether their software will handle the following tasks:

1. Assessment of workforce2. Postponement3. Calculates pension contributions4. Opt-ins and joining5. Opt-outs and refunds6. Generating communications to staff7. Keeps records8. Interoperates with some or all pension scheme providers

3) “Keep things simple…”

“You just press a button and it’s all done for you, I don’t have to worry about auto enrolment anymore”

– Barbara Kurtz, Accounts Clerk at Fishers Chemist

Call IRIS on 0843 357 1802 or Earnie on 0844 815 5677 Visit iris.co.uk/autoenrolment

4) “Payroll is central to auto enrolment success”

In order to be effective, automatic enrolment must take place in payroll. Payroll has access to employees’ PAYE information, and runs the calculations which must be completed before employee assessment can occur. It is only logical that the assessment process should also take place within payroll, to make the process as efficient as possible. On top of this many businesses will have fluctuating workforces with employees on zero hour contracts, temporary staff and seasonal overtime hours. This means an employee who hasn’t been eligible for automatic enrolment in one pay period can suddenly fall into this category in the next pay period.

Tim Baker from Aldens Specialist Catering Butchers in Oxford had this to say about the IRIS AE Suite™:

“The IRIS AE Suite™ offers value for money, is a great help, offers value for money, and I’ve been impressed with IRIS”– Tim Baker, Aldens Specialist Catering Butchers

Call IRIS on 0843 357 1802 or Earnie on 0844 815 5677 Visit iris.co.uk/autoenrolment

“When comparing the middleware solution with the IRIS AE Suite™, it made perfect sense to move to the integrated and less expensive IRIS solution. I would recommend that anyone using middleware take a second look at the IRIS AE Suite™ as there are no surprise costs.”– Jamie Stone, Henshaw’s Society for Blind People

IRIS Managed Payroll Service

Providing communications to employees and deduction information to your pension provider at each pay period is also vital and must be generated by payroll.

As an alternative, you can always outsource your payroll and auto enrolment responsibilities to us. The IRIS Managed Payroll Service is fully BACS and RTI-accredited and allows you to pass over the hassle and pressure of managing payroll and auto enrolment to us.

Why not check out the IRIS Managed Payroll Service Calculator to see how much your business could save.

5) “Test, test, test”

Ensuring your systems are ready in plenty of time for automatic enrolment is the key. Make sure the information you hold about your employees is correct and up-to-date and that your payroll software can produce a pensions output file in the correct format for your pensions provider.

The Pensions Regulator’s website states:

“Inaccurate records or missing data can have serious consequences, which can include staff being automatically enrolled at the wrong time, information about automatic enrolment not getting to the staff member, and the wrong amount being paid to your staff at retirement. It is your responsibility to ensure that records are correct and up-to-date.”

Allow time for software updates to be installed, if required, and make sure your software is configured correctly for your specific pension scheme. It is important that you have the correct training on any new software so that you are able to use it in time for your staging date. The last thing you want is for your staging date to arrive and to realise things aren’t working as you they should.

Call IRIS on 0843 357 1802 or Earnie on 0844 815 5677 Visit iris.co.uk/autoenrolment

It is always best to test your systems and iron out any issues prior your staging date instead of trying to rectify problems later.

Remember:

• There is likely to be a lead time for getting any new software configured

• Check whether there is a standard output file for your chosen pension provider or if a bespoke file will need to be created. Additional time will be needed for any bespoke work

• Make sure that anyone likely to use the software (including employees providing holiday cover) receive the correct training

• Has your chosen solution been tried and tested by others? Make sure your software actually does what it claims to do or you may end up with lots of additional manual work

6) “Work with trusted advisors”

With automatic enrolment being so vital to get right it is important to make sure you work with the right providers and there are a number of sources you can turn to:

The Pensions Regulator

Independent Financial Advisors (IFAs)

IFAs can provide advice to your business about getting the right pension scheme for your business and employees. They can also provide advice to your employees about investing in pension schemes and expected outcomes.

Pensions Providers

Payroll Companies

The Pensions Regulators website contains lots of useful information such as a Staging Date Calculator. It also lists the key tasks you need to complete and when you should be looking at doing them.

Not all pension schemes will be suitable for automatic enrolment so it is important to choose a scheme that meets the legal requirements set up by The Pensions Regulator. NEST is the pension scheme set up by the government and has a public service obligation to accept all employees onto the scheme. They have recently launched their NEST Web Services option, this allows employers to submit their auto enrolment data via a one-click submission system, simplifying how data is sent over to NEST from businesses.

Call IRIS on 0843 357 1802 or Earnie on 0844 815 5677 Visit iris.co.uk/autoenrolment

Make sure you work with a payroll company with a proven track record of handling automatic enrolment within their software and who can provide you with the training and support that you need. It is important that your payroll provider has close relationships with The Pensions Regulator and pension providers such as NEST.

7) “Make sure you get trained as early as possible”

We run a huge selection of training courses, both free and paid-for, onsite and remote, to suit your requirements.

You can check out our selection of webinars which we run at www.iris.co.uk/webinars, they are free to register for and cover a huge range of subjects.

Alternatively, you can visit www.iris.co.uk/trainingdates to see which sessions on auto enrolment we’re running, and when.

By getting trained up on the legislation behind the workplace pension reform, you’re giving yourself a much better chance of getting things right first time when you reach your staging date.

Remember that The Pensions Regulator recommend that you begin preparations for auto enrolment at least 12 months before your staging date, this is simply because of the amount of work and preparation that auto enrolment requires.

Training allows you to better understand what you need to do, and when and how is best to do them.

Call IRIS on 0843 357 1802 or Earnie on 0844 815 5677 Visit iris.co.uk/autoenrolment

Our SME Division CEO explained in a recent blog post that businesses getting proper training was one of his ‘top tips’ for helping to ensure auto enrolment compliance.

He also explained that businesses who prepared early enough “generally found auto enrolment quite straightforward, whereas for businesses who waited too late it was actually quite painful.”

Choose the IRIS AE Suite™

Call 0844 815 5656, or visit iris.co.uk to see how we can help you

The Pensions Regulator recommends that employers use payroll software that caters for their auto enrolment duties.

The easiest way to help ensure compliance with auto enrolment is by making sure that your payroll software is capable of handling the various calculations and deductions each pay period.

By having the right software in place your business can streamline auto enrolment to a fully automatic process.

The right software can save time, help ensure compliance and avoid fines, and also manage the communication aspect of auto enrolment to assist with audits.

Book your free, no-obligation product demo of the IRIS AE Suite™with an auto enrolment expert here at IRIS.

IRIS are proud to offer the industry’s leading auto enrolment solution, the IRIS AE Suite™.

Developed through close relationships with both pensions providers and The Pensions Regulator, as well as customer feedback, the solution works within your payroll to perform the calculations for each pay period automatically.

Additionally, the package automatically creates an audit trail of documentation, and even prepares email templates to employees and The Pensions Regulator on your behalf, so all you need to do is check over them and click send to help ensure compliance.

IRIS Managed Payroll Service

Call 0844 815 5656, or visit iris.co.uk to see how we can help you

Businesses can outsource their whole payroll function or enjoybespoke tailored service from an external provider that allows acompany to focus on their own expertise. Outsourcing payroll has become an option that many organisations are looking at after the introduction of RTI and automatic enrolment.

5 reasons why you should consider outsourcing your payroll:

1. Minimise your auto enrolment stress

2. Save time

3. Reduce your costs

4. Utilise the expertise of experienced payroll professionals

5. Improve efficiency

IRIS has specialised in payroll for over 30 years and this experience means we fully understand all aspects of payroll to be able to offer you a first class service ensuring you are legislatively compliant whilst paying staff accurately and on time. We use our own, market leading, HMRC-accredited payroll software which easily enables us to tailor your payrolls to your individual requirements.

Find out how much payroll outsourcing could save your business by using our free Payroll Outsourcing Calculator.

The introduction of both RTI and auto enrolment have brought with them some of the biggest shake-ups in the payroll sector for decades. Protect your business by outsourcing all responsibility to IRIS’ own BACS-accredited outsourcing option, the IRIS Managed Payroll Service today.

Call 0844 815 5656, or visit iris.co.uk to see how we can help you

About IRIS

With 30 years' experience, IRIS provides business critical software and services to the UK SME sector and accountants in practice. Over 90,000 small and medium-sized companies including 18,000 accountancy practices rely on IRIS every day to run their business and collaborate, with over 600,700 employees being assessed for auto enrolment each pay period using the IRIS AE Suite™.

IRIS Software Group is the number one solution provider for RTI and its software pays 14 percent of UK businesses that operate under PAYE. All customers receive the greatest choice of RTI payroll software and services managed under the brands IRIS, Earnie and KashFlow.

IRIS is renowned for ensuring that all software and services are completely up to date with the latest legislation which means that you in turn as a customer are also kept compliant. We have shown this with the rolling out of RTI and also automatic enrolment. As well as continuously enrolling employees into qualifying pension schemes, IRIS have now developed the IRIS Holiday Pay Module in order to help you calculate holiday pay for your employees.

To see how IRIS can help your business thrive in 2016, get in touch today.

Call us: 0843 357 1802 to speak to an IRIS Auto Enrolment Payroll Expert

Visit us: iris.co.uk

Follow us on Twitter: @IRISPayroll

Legal information

This information does not constitute financial, investment or professional advice and shouldn’t be relied on as such.

IRIS do not make any personal recommendation or give advice to employers and their workers on how to make investment decisions. If you are seeking this kind of advice we would suggest speaking with a qualified financial adviser.