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Auto enrolment: Get a practice strategy now

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27th Jan 2015
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As soon as self assessment season is out of the way, accountants should focus on getting an auto enrolment (AE) strategy in place.

This was one of the big talking points at a recent Friends of Auto Enrolment meeting in Bristol for accountants and IFAs getting to grips with the new pensions regime.

Andy Agathangelou from the CIPP told attendees a “perfect storm” was brewing: “In January 2016 it’s conceivable that it might all go horribly wrong.

“There won’t be any preparation time left next year. It’s really important to get yourself sorted now. Don’t wait until January 2016,” Agathangelou advised.

Part of the process of developing an AE strategy is about finding out what your clients want.

Jerry Musselwhite, a chartered financial planner at PSP, said 80% of clients just want to be compliant and 20% want “bells and whistles” when it comes to AE.

Paul Whitton, a consultant director at Aspirations Financial Advice, added that you need to be prepared to look at your offering and change it as you go along.

Tim Chapman of Simpkins Edwards said he was gearing up for AE this year a learning/training process to work out what the clients want so his firm will be able to provide whatever they need. While Gill Godden of Bristol accounting firm Blenheim said they were starting to develop an AE strategy next month, once tax season was out of the way.

Steve Brice, chair of the Bristol Friends of AE and a senior consultant at LP Auto Enrolment Solutions, agreed that it was important to sound out clients early this year. Firms also needed to work out their own aspirations and capabilities, he said.

The best plan of action is to first get your head around auto enrolment and then decide on the level that you want to get involved, or exit the market completely.

Brice added that while AE is like RTI in some ways, RTI doesn’t involve the clients as much as auto enrolment.

Anthony Carty, group financial planning director at Clifton Wealth, said The Pensions Regulator (TPR) was going to be writing to all employers in February regardless of their staging date. “But there’s still a huge level of ignorance,” he said.

TPR’s online assessment tool will be available soon, but by the regulator's own admission, it's going to be very basic. The new tool is expected to be launched this spring and will deliver tailored guidance to employers, rather than data, about their duties in respect of individual workers.

“It’s not designed as a substitute for commercial products,” a TPR spokesperson told AccountingWEB last year.

There are other surprises lurking that could set your firm back if they are not checked now. An example could be something as fundamental as getting the actual auto enrolment module from your payroll software provider.

“Often you’re going to need to pay extra for it,” one attendee said. “You can get into a false sense of security and just assume that your software provider will be taking care of it.”

With businesses staging for AE shooting up from 40,000 this year to 500,000 in 2016 and then 800,000 in 2017, how are you preparing for your clients?

AccountingWEB has launched the No-one gets left behind campaign to alert as many accountants as possible to the obligations implied by auto enrolment. Read our simple eight-point statement which sets out the auto enrolment facts you need to know.

Replies (8)

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Euan's picture
By Euan MacLennan
27th Jan 2015 10:04

So, why ...

robertlovell wrote:

As soon as self assessment season if out of the way

So, why post this article before the filing deadline?

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7om
By Tom 7000
27th Jan 2015 10:56

Euan

stop playing on here and go and finish those last 8 tax returns :p

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By SteveB@LPAES
29th Jan 2015 07:25

great summary Rob...
With 169 fines issued already from last year as well as 1100+ warnings issued....... and that only includes stagers to July 2014...... this year looks like a big challenge for smaller employers let alone next year.

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By SJBeale
29th Jan 2015 14:29

Pension auto enrolment and small businesses

Small businesses are certainly struggling with pension auto enrolment.  The Pension Regulator website contains too much information which leaves people feeling baffled.

I am doing what I can to give clear simple practical advice to my clients, but many are just not dealing with the process.

I fear there will be many more fines. 

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By SteveB@LPAES
29th Jan 2015 14:43

TPR Research....

Recent TPR Research also tells us that nearly 80% of these businesses will be looking to their accountants to guide them through AE.

Interesting the same research tells us that only 50% are expecting to pay for it though!

I think that was why Rob was suggesting that maybe Feb would be a really good time to decide how much of this accountants can do in house and how much of this requires strategic partnership because come 2016 the time for talking will be done as nearly 50,000 businesses will stage each month rather than just under 50,000 in a year.

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Euan's picture
By Euan MacLennan
06th Feb 2015 11:08

TPR is the main source of misinformation

robertlovell wrote:

With businesses staging for AE shooting up from 40,000 this year to 500,000 in 2016 and then 800,000 in 2017, how are you preparing for your clients?

They may have a staging date, but how many of them will need to set up an AE compliant pension scheme?

It is not surprising that small employers are confused about the requirements of auto-enrolment when the letter from the Executive Director of TPR a year ahead of the staging date is full of dire warnings, but completely fails to mention that if the employer has no staff (workers) apart from the director(s), the letter can be ignored because the company is not required to set up an AE pension scheme.  Many such OMBs may well be ignorant of the AE requirements, but as they are not affected, why should they know anything about it?

It would be more helpful to all of us if those in the pensions industry put pressure on TPR to mend its ways, rather than trying to frighten accountants by making mountains out of molehills.

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By SteveB@LPAES
06th Feb 2015 12:18

Mountains and molehills...

Even though there are some exemptions everyone seems fixated on the pension scheme.

Assessing staff is the key task because the exemption for so called "close company's" is around setting up a scheme not an exemption form assessing all staff and completing the registration of compliance.

Not completing a registration of compliance is what 169 firms have been fined for as at July 2014-Dec 2014. This process tells the regular that they have complied by doing nothing. Seems strange but that will remove this company from the radar as far as TPR are concerned.

There is certainly no wish to scare anyone into doing unnecessary work but too many businesses and accountants think they can leave their planning and decision making until next year when 500,000 business will actually need to do this! There will be no time to debate these issues of whether they need a scheme or not. Processes will need to be in place by the middle of this year at the latest otherwise there may be a huge increase in fines issued by the regulator.

Its not as if anyone in the adviser community invented this stuff it came from government and is now a legal requirement. It will happen anyway so we can either ignore it or deal with it in the most effective way we can.

No wrong answers just decisions to be made.

Payroll and AE are linked and anyone who is intending to run payroll in 2015 and beyond will need a strategy to deal with AE or may find they are not doing payroll anymore... and that may be a strategy by the way.

 

 

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avatar
By Practical Advice
03rd Mar 2015 08:28

Keeping it Simple

Henry Tapper of Pensions Playpen recently posted an excellent article about auto enrolment where he said that clients want solutions not just information.  By engaging with clients to explain what they can expect and offering to help them we get thanks, recommendations and people paying for auto enrolment services.

Much of the compliance for micro firms is straightforward, the knack is knowing which need more compehensive advice and how to add relevant disclaimers to concentrate peoples minds.   It isn't any good to provide a very simple Get You Out of Jail free service without doing at least a little due diligence to protect ourselves and our clients.

Many people aren't aware that single director firms with no staff (who are exempt from Auto Enrolment) are still likely to get a letter from The Pensions Regulator inviting them to complete the full auto enrolment framework.  This is because TPR have a list of all active payrolls but have not been told how many people work at each or how many directors.   How good would your micro single director firms feel if you have a simple free way of getting them declared exempt?  Its a marvelous way to generate referrals and general good feeling.

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