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AE fees for inactive pension schemes?

AE fees for inactive pension schemes?

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I do the payroll and operate the - mostly NEST - AE schemes for all of my small employers.

After set-up my minimum months fee on top of existing payroll fee is £25 pm for operating the AE scheme for up to 5 employees on the payroll.

However, I'm not sure that I've yet appreciated all the nuances of a pricing structure, eg:

Scenario 1
One client has 5 non-eligible employees, an occasional turnover of staff, and I personally don't expect any of them to opt-in, but who knows. My advice leaves the decision with the employer to set-up a shell NEST scheme just in-case an employee opts-in, or not.

Let's say this employer doesn't set-up a scheme, all employees are currently non-eligible, and so from their point of view once I've charged them for the set-up (including advice, initial communications to employees and DoC) I don't think that they're expect much more in the way of fees - at least it's rare that they'll see me in action. But, we know that there is the responsibility of continual assessment, communications to new employees or those that become eligible etc.

My feeling is that there should be a monthly fee where there are any employees on the payroll (excluding directors) albeit maybe a discounted fee.

Scenario 2
One client has two non-eligible employees (family members) will he believes will never opt-in. He's highly unlikely to have any staff turnover and these employees are highly unlikely to ever in any pay period change from non-eligible to eligible.

Going by my feelings above then there should be a monthly fee in this case too but this seems even more difficult to justify.

The ultimate question is do you charge running fees where the actual pension scheme is inactive because all employees are currently non-eligible and have not opted in?

Replies (3)

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By BrianNicholls
28th Apr 2016 12:23

Continual assessment is the

Continual assessment is the client's responsibility. Isn't it up to them whether they do this themselves, or hire you to do this for them?

If they want to do this themselves, no charge. If they want you to do it, they have to pay.

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Replying to BrianNicholls:
By chewmac
09th May 2016 14:50

You hit the nail on the head here. So for anyone that's interested I'll be charging £10 pm for continual assessment or £nil if the client chooses to take on this responsibility themselves.

So, in my scenarios above: No 1 - I believe would be well advised to pay for continual assessment (and I believe that even if software is doing the work it's a fair charge).

No. 2 - I wouldn't be worried if they choose to continually assess themselves due to the stability of their workforce.

I feel this system does allow for these nuances. I hope this helps others.

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By SteveHa
28th Apr 2016 14:14

Up to now we haven't bothered. Assessment is a single click in Moneysoft, we only do the assessment and produce the upload. Compliance etc. is the client's responsibility. It's difficult to justify extra fees for a minute's work.

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