Auto enrolment: A perfect storm for accountants

Lethargy among small business owners, combined with a potential capacity crunch among expert advisers could lead to the perfect storm for accountants when it comes to auto enrolment (AE), says Anthony Carty, group financial planning director at Clifton Wealth.

Much has been written about the ‘how to’s’ and ‘wherefores’ of AE. The fact is, the initiative is underway; has already seen more than one million employees sign up to pension schemes; and, in general, the large corporates have coped relatively well with the infrastructure changes and communication surrounding AE.

Among the early surprises – even to The Pension Regulator (TPR) itself – is that despite predictions of around 30% of staff choosing to opt-out of the mandatory scheme, only some 10% have actually done so, according to the latest government figures.

Equally, TPR is clearly taking its remit extremely...

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Comments
Tom 7000's picture

I had a large client ask about it...

Tom 7000 | | Permalink

I asked the local IFA ...said he wasn't interested...nothing in it for him

Spoke to big pension co...they wern't interested either

 

I told the client I couldnt find anyone to help

 

The result was after they looked around the client decide to go to  NEST

 

 

 

 

 

Auto enrolment

Nigel Sycamore | | Permalink

Anthony is right and our experiences at Clear Workplace would seem to mirror his. Demand for our middleware is increasing all the time.

This is a massive opportunity for accountants to add value and earn additional fee income. Our accountant partners are already seeing a steady stream of enquiries from employers and having the right middleware solution in place is vital to getting it right.

Auto enrolment is a great 'excuse' for accountants to be proactive and differentiate their payroll bureau offering to win more clients.

Happy hunting, everyone!

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ireallyshouldkn... | | Permalink

@Tom, sales puff aside down at the dirty end that sort of thing is going to be what we we end up doing. The main issue is the advice side which I don't think we are able to provide?

As ever I imagine the answer is to get a workable system to cope with the volume and charge enough to make it worth the bother, no doubt there will be huge changes at the NEST end once they get hit by the tidal wave of small co's with one or two employees so its going to be hard to price until they sort out what they want people to do when its mass volume/small value.

Its a bit like the director only payrolls for RTI being a "surprise" to HMRC when by volume they are by far the most numerous set up.  

Financial Advice    2 thanks

HudsonCo | | Permalink

Recent ICAEW/QAD seminar says that NEST is a financial product and therefore we are not qualified to recommend it. Could be interesting.

.

ireallyshouldkn... | | Permalink

@hudson, I was afraid that would be the case. We are going to end up with a fudge on this along the lines of having to do a  "I cant advise you as we are not independent financial advisors,  but what I can tell you what we have done as a firm, and if you chose the same route - having taken independent advice - we can do the same for you". 

SteveB@LPAES's picture

AE compliance    1 thanks

SteveB@LPAES | | Permalink

 ....aside form the regulated advice, which as you have quite rightly pointed out needs to be provided, where required, by an IFA there is the issue of compliance with the other 95% of the legislation.

An employer will need to establish their staging date, segment their staff both at outset and every subsequent pay ref period into three distinct sub sets, communicate with them separately and auto enrol the eligible jobholders. The employer will need to record anyone who opts out, without being able to opt them out themselves and where applicable issue refunds of contributions to members who chose to opt out within the opt out window. This will be notified by your chosen pension provider but may some some time after teh individual has opted out....could be two months!

All of this activity/communication will need to be recorded and kept for a minimum of six years...oh and you have re enrol all of those who opt out every three years so best start marking diary dates on each members' file who opts out....unless of course they opt out within twelve months of the triannual anniversary of your staging date in which case they are re enrolled after four years.

I actually dont think the pension is the problem here...........

 

Come April next year in excess of 10,000 employers a month will be staging....come 2015 that will be nearly 60,000 each month and come 2016 it peaks at 137,000 employers each month.

Something tells me a manual solution just wont cut it!

 

JAADAMS's picture

Funnily enough ...

JAADAMS | | Permalink

I went on a course yesterday when this subject came up. The speaker predicted that come April next year everyone will suddenly wake up to Auto enrolment, - that is employers, employees and accountants - the financial services wont be able to cope with the numbers applying so the ones who havent planned in advance will have no choice but to go into NEST.

The speaker also said that there was a 3 month 'lead in' time for setting up a non NEST scheme so clients should be being advised now.

But nest will not administer

0098087 | | Permalink

But nest will not administer the scheme. Which means the employer will..nightmare!!

henrytapper's picture

ICAEW are changing their position in light of clarification

henrytapper | | Permalink

HudsonCo wrote:

Recent ICAEW/QAD seminar says that NEST is a financial product and therefore we are not qualified to recommend it. Could be interesting.

 

 

 

The FCA and Pension Regulator have issues a joint communique in March that states clearly that advising employers on workplace pensions (including advice on the financial product) is a non-regulated activity.

 

The confusion has arisen because advising individuals about workplace pensions is a regulated activity.

 

I'm prepared to risk my firm's reputation on this and have been to the ICAEW who now accept that their previously held position is no longer right.

 

 

Auto Enrolment

MattAtNurture | | Permalink

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