A few things to consider when choosing a pension scheme for Automatic Enrolment
If your client has eligible jobholders then they will need to setup an automatic enrolment (AE) pension scheme to enrol employees into. If your client has no eligible jobholders then they do not need to set up a scheme. However, if there are any non-eligible jobholders, they will have right to opt in to a pension scheme. If this is the case, the employer would need to set up a pension scheme. It would be a good idea for your client to provisionally choose a scheme should this be the case
Factors to consider …..
- If your client already has a pension scheme in place check that it meets the criteria to be an auto enrolment qualifying pension scheme. A good resource is the detailed guidance for employers on the Pensions Regulator site: Pension schemes under the new employer duties.
- Each pension scheme will have varying costs so it will be important to fully understand all the associated costs for your client and for their employees. Some schemes may even charge an exit fee so make sure to read the terms and conditions.
- Whatever pension scheme your client chooses, you will need to check to see if it is compatible with the payroll software currently being used. It will make life easier if the pension scheme and payroll either directly integrate or are supported by the payroll. Your payroll software should be able to easily produce contribution files, and where applicable enrolment files, in the required format of the chosen pension provider.
- Make sure you afford your clients plenty of time to choose an auto enrolment pension scheme suitable to their needs.. Some employers may choose to seek professional advice or they may ask you for help. There is more information available on the Pensions Regulator's website that you can refer to.
- The pension scheme must meet certain qualifying criteria and minimum requirements to be suitable for automatic enrolment. There should not be anything in the pension scheme rules to prevent your client from complying with AE.
- Certain pension providers will handle the auto enrolment communications for you. However producing your letters for each staff member should be easily handled by your payroll software.
Finding a Pension Scheme
There is a growing choice of pension providers available for auto enrolment, almost too much choice. The chosen pension scheme will need to accept all your clients staff. It would be a good idea to look at reviews of schemes that have been independently reviewed. Look at TPR’s website to examine pension schemes to see which one is suitable for your client and their staff. Employers are increasingly using schemes that are run by large and specialist pension providers designed to be used by many different types of employers. Some employers are using software tools such as Pension Playpen to help them with their decision.
BrightPay & AE Pension Schemes
BrightPay offers support for 17 auto enrolment pension schemes. BrightPay will create and save the data files in the specific format that is required for each of the listed AE schemes. BrightPay also offers API or direct integration with NEST and Smart Pension. This allows users to submit their information directly from within the payroll. We are working with more of the larger pension providers to offer the same integration for more pension schemes over the coming months.
Why not book a BrightPay demo to see just how easy it is to use BrightPay with your chosen pension provider.
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Find out more:
- BrightPay’s AE pension schemes
- BrightPay & NEST web services / API integration facility
- BrightPay & Smart Pension API