Auto enrolment: No-one gets left behind

AccountingWEB has officially launched the 'No-one gets left behind' campaign to alert as many accountants as possible to the obligations implied by automatic enrolment.

We’ve long been concerned that small businesses and accountants are not sufficiently aware of the existence or implications of workplace pensions. Over the next few years nearly a million businesses will be compelled to offer a company pension to their employees.

AccountingWEB and our campaign supporters believe that practitioners hold the key to small and medium-sized businesses successfully enrolling their employees.

The importance of accountants in the auto enrolment process was even noted by pensions minister Steve Webb at a Friends of Automatic Enrolment meeting organised by the CIPP back in June.

Webb acknowledged the role of trusted advisers to businesses in the overall programme and admitted that he needs to start spending more time with accountants.

AccountingWEB publisher Andy North, who is spearheading the ‘No-one gets left behind’ campaign and is co-chair of the Bristol Friends of Automatic Enrolment chapter, said the campaign is essential to help accountants and businesses understand their obligations and the requirements surrounding the staging for auto enrolment in the months ahead.

“As the volume of businesses needing to deal with auto enrolment increases, good quality and appropriate advice will be at a premium,” he said. “Among other issues, we’ve found that businesses have been struggling with the evaluation of their employees to determine eligibility. This is one of the critical and yet most challenging elements of the requirements.”

As we’ve seen from the larger businesses that have already staged, the communications, data management skills, scheme selection and sheer manpower required has thrown many employers off.

One such example has been Dunelm Soft Furnishings - flagged by the Pensions Regulator as a cautionary tale - who underpaid its initial AE contributions by £143,000 as a result of a defective payroll system.

“Just complying with the regulations is a job in itself,” North added.

The ‘No-one gets left behind’ campaign highlights the eight things you need to know to be ready for auto enrolment.

Campaign supporters so far include:

  • Barnett Waddingham
  • CIPP
  • Clifton Auto Enrolment
  • Core Employee Benefits
  • Friendly Pensions
  • LP Auto Enrolment Solutions
  • Pension PlayPen
  • Sage

By signing up to the campaign, you are demonstrating that you are willing to engage with auto enrolment and see your company and/or clients through staging in the months ahead.

Recent auto enrolment coverage on AccountingWEB includes:

 

Read our simple eight-point statement which sets out the auto enrolment facts you need to know.

Comments
Old Greying Accountant's picture

Thank you so much ...    2 thanks

Old Greying Acc... | | Permalink

... this is fantastic, with a bit of editing it can form the basis of a mailout for my clients - I have been trying to get something like this together as a phase one mailshot and this hits the spot perfectly.

Enough information to get their attention, but not too much to make them glaze over, again, thank you.

Old Greying Accountant's picture

But ,,,

Old Greying Acc... | | Permalink

,,, had a letter from HMRC regarding a new PAYE scheme. Enclosed was a four page leaflet from ACAS "A guide for new employers".

Ironically, they had an eight point check list but not once on four sides of A4 does it mentions pensions and/or auto enrolment.

This is to me ludicrous and verging on negligent.

Euan MacLennan's picture

It's the name which is wrong    2 thanks

Euan MacLennan | | Permalink

What does "Auto-enrolment" convey to a small businessman?  Something to do with cars?  Driving school?  Whoever thought up the moniker is responsible for the lack of interest in the topic.

"Compulsory pensions for employees" would have caught the attention.

The other problem is the ludicrously complicated rules.  Some employees are in, but can opt out.  Other employees are out, but can opt in.  Yet others are out and cannot opt in.  Explaining this to clients is going to be more difficult than explaining deferred tax.

Old Greying Accountant's picture

@ Euan ...    5 thanks

Old Greying Acc... | | Permalink

... How about "Yet another way to screw money out of small business, drown them in paper work and line the pockets of the financial services industry because they so deserve it" - catchy don't you think?

The most ludicrous thing is that those under the LEL can opt in but the employer need not contribute, the very people who need all the help they can get - so someone on £40k who should be sorting themselves ot gets 3% put in for free, someone on £5k gets nowt!

 

Locutus's picture

It would have been far, far simpler if ...    1 thanks

Locutus | | Permalink

X% had been added to employee NI contributions and Y% had been added to employer NI contributions, paid over to HMRC via the normal PAYE process.

After the tax year end, the employee elects which pension fund the X% and Y% should be invested in, if they don't want to use the default Government managed scheme.

What happened to simplification?

Democratus's picture

@ Locutus

Democratus | | Permalink

Is that how the Borg do it - seems rational, the sooner you assimilate the civil service the better.

Locutus's picture

Assimilation    1 thanks

Locutus | | Permalink

Democratus wrote:

Is that how the Borg do it - seems rational, the sooner you assimilate the civil service the better.

I think even the Borg would struggle to assimilate the Civil Service.  After 4 years of trying they would give up and return to their home world, with a trail of red tape stretching back 5 light years.

If only Picard had known about their secret weapon - the "Sir Humpfrey"

memyself-eye's picture

maybe seven of nine    1 thanks

memyself-eye | | Permalink

could explain it all - I would immediately vote to be assimilated (or is it humiliated?)

Locutus's picture

Seven of Nine

Locutus | | Permalink

memyself-eye wrote:

could explain it all - I would immediately vote to be assimilated (or is it humiliated?)

She made the Borg sexy, with her figure hugging catsuit.  Perhaps that's what auto-enrolment needs - something to capture the attention.  I must agree with Euan, that the words "auto-enrolment" hardly stands up and grabs the attention of the small business owner.

Red Leader's picture

staging date

Red Leader | | Permalink

The earliest staging date for any of my payroll clients is February 2016.

Presumably I can forget about this until say April 2015?

Democratus's picture

Gold 5 to Red Leader

Democratus | | Permalink

Red Leader wrote:

The earliest staging date for any of my payroll clients is February 2016.

Presumably I can forget about this until say April 2015?

General rule is start 12 months beforehand - loads of smaller entities will all stage at around the same time so allow for delays from pension providers who will similarly be swamped.

 

 

Old Greying Accountant's picture

Similar to what I have always sad ...    1 thanks

Old Greying Acc... | | Permalink

Locutus wrote:
X% had been added to employee NI contributions and Y% had been added to employer NI contributions, paid over to HMRC via the normal PAYE process. After the tax year end, the employee elects which pension fund the X% and Y% should be invested in, if they don't want to use the default Government managed scheme. What happened to simplification?

if employee opts out then inform employer by RTI, of if they were serious, not allow opt out. There should be a government run "nest" type fund, and the only opt out would to be say your own scottish widows or whatever fund,

It would make far more sense to have the government as a hub and employers connected via the spokes of RTI. The chosen option had wheels within wheels with a cobwebs of hubs and spokes which can only result in a complete tangle.

memyself-eye's picture

I'm amused    1 thanks

memyself-eye | | Permalink

by the thought that employees earning modest salaries (say £10k or less) are being 'conned' into imagining that they can ever hope to accrue sufficient - even at 8% pa - to retire on a decent pension.

Actually amused is the wrong word - I remember the 'stakeholder' pension fiasco under that great economic mind Gordon Brown.

To think we once had the best pension system in Europe... 

henrytapper's picture

Those on low-earnings are laughing    4 thanks

henrytapper | | Permalink

If you've spent all your working life on minimum wages- your retirement's going to be lush.

You get a upgraded state pension (£7500k+) - a big personal allowance that says you'll never pay tax again and plenty of benefits even before you get your pension savings.

A little bit of maths will allow you to draw the savings tax free too!

 

It's the poor sods who are in the squeezed middle who will see the biggest falls in income !

 

waste of time    2 thanks

qad999 | | Permalink


all private pensions are a waste of time,... by the time you factor in commisson and management fees (and poor investment manager decisions) , its rarely worth putting away funds long term .. just another excuse by  the state to divest itself of the responsibility for state pensions  because they know that lifetime contribution simply cannot fund the ever ageing population, whilst at the same time mp's safely closet themselves with civil servant  schemes

Euan MacLennan's picture

Another misnomer

Euan MacLennan | | Permalink

Red Leader wrote:

staging date

The earliest staging date for any of my payroll clients is February 2016.

Presumably I can forget about this until say April 2015?

What does "staging date" convey to the ordinary person?  A transition in an ongoing process?  The first rehearsal of a new theatrical show?

It is not a staging date, but a compulsory start date - unless, of course, you take advantage of yet another complexity in the rules by opting for a 3 month deferment.

Life of Reilly

chatman | | Permalink

henrytapper wrote:

If you've spent all your working life on minimum wages- your retirement's going to be lush.

You get a upgraded state pension (£7500k+)

Lucky them. It will be a life of champagne and Caribbean cruises. How could anyone spend as much as £7,500 in a year?

AWeb could help    1 thanks

chatman | | Permalink

What would be really useful from AccountingWeb is a table comparing the fixed and variable costs of the major pension providers including the master trusts.

Can't wait

Ian McTernan CTA | | Permalink

Can't wait for the huge mis selling scandal in about ten years time when lawyers get their teeth into bad provision, choice of fund, etc.  Of course the insurance companies will come up with policies to cover the employer against such claims and the financial services industry will reap in yet more money.

This could have been made very simple by offering one of two choices: either you opt out by proving that you have your own pension scheme (into which the employer's contribution will now go) or you join the employer's scheme (signing a waiver against having any right of taking a case against them in the future for poor investment decisions by whichever pension provider was chosen by the employer).  The employer's contribution would be funded from their employer's NIC contributions, the employee's from employee NIC, so there is an incentive to sign up for both parties.  Put a maximum rebate on each of 5%.  Will reduce Government NIC income but will provide at least something for everyone to retire on.

National Insurance Scheme    4 thanks

chatman | | Permalink

Ian McTernan CTA wrote:

This could have been made very simple by offering one of two choices

There is actually a third one: the Government could run a pension scheme. They could call the contributions, National Insurance contributions. 

SteveB@LPAES's picture

Time for change is already upon us!

SteveB@LPAES | | Permalink

Whether we like the legislation or not it is upon us and is not going anywhere, anytime soon.

 

If it is as complex as it sounds (reading the messages left above) then maybe its time for every accounting and payroll professional to team up with one of the companies supporting this campaign and make the transition for their clients (and their own workloads) as easy as they can!

No-one can escape from the fact that Payroll holds the data required to successfully run Auto Enrolment. So it strikes me that everyone of the 1.2 million businesses out there WILL approach their payroll provider or accountant to get this data at some point.

If you hold that data you can either wait to be asked at the same time as the other 60,000 businesses who are also staging around the country this same month or you can be pro-active and tell your clients that you have it covered and manage the workload for your payroll team in advance.

I make no political statement about whether AE is good or bad...I am merely saying it is here and its coming to a payslip near you ..soon!!

"There is actually a third    1 thanks

NeilW | | Permalink

"There is actually a third one: the Government could run a pension scheme. They could call the contributions, National Insurance contributions. "

That third one is the only one that exists - private pensions are paid largely with Gilt interest and the current worker's contributions.

Economically pensions are always a current production issue - how much of the current production is available to those who take no part in its production. You can have billions put away but if nobody bothered to invest in infrastructure and education in previous years (because everybody was far too busy using investment money to save for a pension and buying overpriced existing assets from previous retirees), then there won't actually be any output to buy.

So the whole of the pension industry is just a job creation scheme, and the reason they suddenly need 'compulsion' is so that the overpriced assets of the current set of savers can be dumped on a new generation at the higher price. 

Auto-enrollment essentially makes you the greater fool. 

Nick Graves's picture

Auto-enslavement more like.

Nick Graves | | Permalink

Not only can Pension Companies understandably NBA with micro-entities on profit grounds, the idea of forcing people into another Ponzi scheme against their free will or better judgment and when they probably earn buttons anyway, is illiberal to say the least. 

But by the time the mis-selling scandal breaks, those responsible will be out of politics and have NEDs, probably on the boards of pension companies.

 

henrytapper's picture

It's a really great question-    1 thanks

henrytapper | | Permalink

In response to Chatman's post

 

  What would be really useful from AccountingWeb is a table comparing the fixed and variable costs of the major pension providers including the master trusts

 

It's a really great question- especially on a day when the FCA launched yet another consultation into pension scheme governance.

The FCA are proposing that the Independent Governance Committees publish this information so that they can benchmark themselves against others, The rules are set to come in from April 2015 so we won't get meaningful data till 2016 but your request looks like it will be granted (eventually)

You cannot understand the cost of pension investment by looking at the stated charges. The AMC is the tip of the iceberg- what's below the waterline are the costs of the investment which are mainly borne from "Net Asset Value", that's the value of the investment fund. The only way to understand what has been lost to traders/brokers by way of dealing costs/stamp duty/FX/legal/research and most importantly not the spreads from "market impact" is to examine every ticket of every trade;.

If the FCA gets it way, this is exactly what the new IGCs will require asset managers to publish. But right now you have to comb through the long accounts of each fund to find out what's coming out.

www.pensionplaypen.com allow you to get quotes from up to20 providers for any employer from 1 to100,000 employees but we cannot (yet) provide you with details of the true cost of investment.

Our advice is to stay passive where the AMC and the total costs are close - unless you properly understand active management - you have no idea what you are buying and whether you are getting value for money.

I speak as someone who has been an investment consultant and is experienced enough to know how little he knows!

 

 

 

Oh my lord leave us alone ....................

peter.phalichfield | | Permalink

Some brilliant comments so far.

Can I just bury my head in the sand and hope that it all goes away please?

SteveB@LPAES's picture

you could.....    1 thanks

SteveB@LPAES | | Permalink

...but I'm guessing the next time you look up it won't have gone away and the tide may have come in a little??

As Seven of Nine would say    1 thanks

Sherman Holter | | Permalink

Describing this hotch-potch, Seven of Nine would say, very fittingly:-

You lack cohesion!

henrytapper's picture

Directory

henrytapper | | Permalink


Is Accounting Web planning to create a directory of those accountants who have joined this campaign?

If a small employer isn't getting any help and fears getting left behind- wouldn't it be helpful to have a geographically searchable directory to find accountants who are?