Put AE data procedures in place now

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Getting data procedures in place and being proactive early on is essential to the smooth running of automatic enrolment (AE) in your business or accounting practice.

The first in this series of articles in association with NEST looked at auto enrolment and the key data requirements you need to know as an accountant. In this article we look at AE data in more detail and explore what actions you need to take and when in order to make the process run efficiently.

Make decisions early

AE duties are heavily dependent on accurate and up-to-date data.

As early as possible, carry out a review of your company or client’s processes with payroll or software providers to ensure you can collate the required data on a regular basis.

Payroll normally holds information such as salary and NI number for employees. You need to think about how this data comes together each pay reference period to manage the scheme going forward.

Action for data success

Get the payroll and processes ready ahead of the staging date and for ongoing duties.

At least six months prior to staging establish how your processes and products work together, as well as the size of the workforce.

Plan how to resource the new duties in terms of the processes and systems you want to use. Think about the time and resources required, and consider automation where possible to reduce the burden on the business.

It’s important that data leaves the payroll process for assessment in a standardised way so that it can be loaded, assessed and returned with minimal risk. You can create a CSV file from the existing payroll data.

Identify any data gaps you might have – often more data is required for AE.

Never underestimate how long data processing can take – give yourself plenty of time to be compliant.

Key action points

  • Prepare data - check the completeness and accuracy of the data you are using.
  • Employers need to send data to the pension scheme and also find out certain information about how the pension scheme is set up.
  • Employers need to provide the pension scheme with certain information about the eligible jobholder who is being automatically enrolled.
  • Employers using an existing pension provider need to check data requirements are already included in their joining process.
  • Get familiar with any additional data requirements to help smooth the AE process.

Automate where possible

To ensure the efficient running of AE, it is essential payroll systems and middleware products can automate. You will need to be able to exchange data files with pension provider systems, for example the export of payroll information including pension contributions.

You will need to consider employee assessment, including HR data interrogation, and employee communications.

You will be required to manage enrolments, opt-outs, opt-ins and joiners, as well as the calculation of pension contributions including where there are different contribution rates and refunds.

When it comes to postponement, the payroll system should be able to adjust the postponement period to suit the requirements of specific clients.

Finally, once you’ve staged your business or client will need to deal with ongoing monitoring, recordkeeping and reporting requirements to continue to comply with the legislation.

Put simply: get planning and make the key data decisions now.

If you’re an accountant, bookkeeper, adviser or payroll professional, you can use NEST Connect, the free online hub that has all you need to help clients with pension scheme administration. Also take a look at the recent NEST webinar with AccountingWEB and download an essential guide to working with NEST.

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.

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Running an Employee meeting on AE

No-one, including Nest and the Pensions regulator can be bothered to provide a checklist of items to cover with employees when holding a meeting to explain auto enrolment to them.

I didn't want to get involved with the meetings side of things but have now realised I must, as even my bright spark clients feel very confused.

So I will carry on looking, but I bet I don't find anything useful and will have to spend hours I don't have devising a standard presentation.

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