10 years of Nest: a staggering success story with payroll the unsung hero
10 million members. £20 billion invested. In just 10 years. But Nest couldn’t have done it without the extraordinary efforts of the payroll industry.
10 million enrolments processed. £20 billion worth of contributions processed. The complexity of this work and the threat of penalties for getting it wrong means that there is an army of professional bookkeepers, accountants and payroll administrators required to help employers to meet their auto enrolment duties.
Assessing the workforce. Sending the letters. Processing the enrolments. Calculating and sending the contributions. Managing opt ins and opt outs. This represents a mountain of work for already busy payroll teams.
And it’s only just begun. By the end of this decade, Nest forecast that the total amount invested will hit a staggering £100 billion.
How much work is involved in managing clients’ Nest schemes?
While the Nest website is well-designed and makes it possible for employers to self-serve, its task-based approach means it is quite labour intensive. You have to process any enrolments, and wait for the system to update. Then you have to process the contributions, updating the records to reflect any leavers or anyone who doesn’t have contributions in the pay period. Again there may be a processing delay, before you can move onto the final step - which is to manually approve the payment of the contributions.
Nest Connect allows payroll professionals to manage multiple clients’ pensions through a single login, but it doesn’t remove any of the labour. Every step of the process still needs to be completed in order, allowing for processing times in between. There is little or no automation or bulk processing within the Nest portal itself. This creates a reality in which, on a monthly basis, a medium-sized payroll bureau may find themselves counting the time spent administering Nest in days rather than hours.
How can payroll teams manage the workload efficiently?
There are some reliefs - it is possible, for example, to use CSV files to upload the data for most of the processes, rather than manually typing everything in. While this improves data accuracy and avoids manual keying errors, it is still necessary to navigate to each client, and then click through the various different screens you need to complete the uploads on. For SME clients, uploading a file may not save a huge amount of time compared to keying in the data manually and the repetitive navigation between web pages is still going to eat up a lot of time.
The better option is to use payroll integration technology (technically known as payroll APIs). These create a secure data pipeline between your payroll software and Nest, giving you the accuracy of a CSV file while ALSO removing the time spent navigating the Nest website. With payroll integration, you can remove the need to login to Nest at all, with processes instead triggered from within your payroll application or through PensionSync, which runs seamlessly alongside your payroll.
Many payroll software products now offer some level of integration with Nest, and PensionSync’s comprehensive Dashboard solution provides a one-stop-shop service for Nest as well as The People’s Pension, Smart Pension, Aviva, NOW: Pensions and Legal & General.
How to find out more about payroll integration and Nest
There is a great short video detailing the successes of Nest, and their plans for the future, here: https://www.nestpensions.org.uk/schemeweb/nest/ten-years-of-nest.html
One thing that is clear is that the success of Nest and of auto enrolment in general over the last decade is just the start, and that the workload isn’t going to go away anytime soon. If you haven’t found the right solution to make it an efficient, profitable process for your payroll business yet, now is the time to review your options.
Please reach out to our team here: https://www.pensionsync.com/contact and we’ll be happy to provide you with guidance and chat through the options available to you.
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