Auto enrolment: A common data standard is a must
With auto enrolment now about to take effect on the smaller-sized marketplace it’s good to see so many organisations backing the call for a common data standard, says Dawn Jackson, payroll product manager at Access Group.
At a recent Friends of AE meeting, Origo Standards, which has more than 25 years’ expertise in this area, also gave its support to this initiative, Project PAPDIS, which will prove vital to the success of auto enrolment going forward. As part of the Pensions BIB team [an informal collaboration of BCS Payroll Group, IReeN and BASDA HR & Payroll Special Interest Group] that initiated this project, I’m keen to see as many organisations as possible implementing the standard. And here’s why.
Auto enrolment is already a huge topic, and data transfer is only one small part of that. However, it’s an important element and by uniting payroll providers and pension providers we can be proactive in creating a solution for all. With only a limited time frame before we see a sharp increase in the number of organisations staging – which includes not-for-profit organisations as well as businesses – there is a real need to act now, with the highest peaks of smaller and micro organisations coming on board from 2016 to 2018.
With this in mind organisations should start thinking about auto enrolment early on, giving themselves a good 12 months where possible to prepare. Many may have already seen the public reprimand that Dunelm received from The Pension Regulator when it didn’t complete the auto enrolment processes required by the deadline. It’s a point that should be heeded, as the regulators have the power to impose fines if they wish and at some point may well do so.
This is why starting early is key to ensure all the necessary requirements can be met in time. And it’s also why at the Pensions BIB we’ve been busy getting feedback from the industry on the draft standard, so that we can release the full specification in plenty of time to allow software vendors to start incorporating it into their software for April next year at the earliest.
Having already received tremendous support for the initiative, it’s clear that everyone we’ve spoken to can see the sense in having a free and open data standard, available for everyone to use, if they wish to do so. It will make everyone’s lives easier in terms of transferring data between payroll software and the pension provider.
This will be critical, particularly when the number of companies staging is set to reach 130,000 or more each quarter. These smaller organisations may lack the resources to deal with the challenges of auto enrolment. Some will be looking to their accountant or payroll bureaux to help them out, so accountancy firms may find themselves on the front line alongside other advisers, and will need to be well prepared to help their clients. Many have already been speaking to their clients to drive home the importance of preparation. The Chartered Institute of Payroll Professionals (CIPP) will be holding events on auto enrolment to raise awareness and understanding which will help accountants to assist their clients in preparing for the changes.
We’d advise people to check whether their existing pension arrangement can be used for auto enrolment (don’t just assume it can) and to check to what extent their payroll supports auto enrolment. If organisations don’t feel they can manage the auto enrolment process themselves, then they could outsource to a payroll bureau. However, it would be prudent to check as soon as possible that their intended provider has the capacity to service them. Find out what contingencies and resources they have – or will have – in place.
And this comes full circle as to why it’s so important that we have the one data standard. Without it, not only organisations but payroll bureaux will face the complexity of dealing with a plethora of formats – if indeed they are available. A free and open data standard is a must to avoid this issue.
It has been amazing to see the payroll and pensions industries working together to at least simplify a small part of the auto enrolment process. We all have to be speaking the same language and standardisation will help to reduce unnecessary cost, complexity and to comply with regulation. As a result there’s less likely to be mistakes and it will take less time to complete the data transfer to pension providers - and surely that’s got to be good news for everyone.
Dawn Jackson is payroll product manager for integrated business software provider Access Group and member of the BCS Payroll Group.
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.