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Auto Enrolment: Transferring your workplace pension pot

18th Jul 2017
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The payroll solution that provides all you need for Auto Enrolment.

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With auto enrolment, many smaller employers are leaving their duties until the last minute and do not have enough time to choose a suitable pension scheme for both their business and their employees. Fortunately, if an employer is unhappy with their chosen pension provider, they can choose to transfer their enrolled employees to a different workplace pension scheme.

When switching pension providers, it is important to do your due diligence. There are many different factors to consider when deciding whether or not to transfer your pension pot or stick with your existing one. It’s important to be aware that transferring money may not be in everybody’s interests.

The first step is to do your research and shop around for a new workplace pension provider. If you have a particular pension scheme in mind, make sure to examine the various costs and charges that will be incurred as a result of the transfer.

Be aware that both the employer and employee may have to make a payment to the new scheme AND pay a fee to make the transfer. Employees may also lose any agreements with the initial pension provider, such as the right to take their pension out at a certain age or any protection agreed with the previous pension provider.

How the process works in Payroll?

Payroll software, such as BrightPay, will allow you to easily switch from one pension scheme to another. BrightPay enables an enrolled, opted in, or joined employee to be easily moved from one scheme to another completely new provider. This can be done for multiple employees at the same time, or on an individual basis if required. When switching to a new pension provider, a new enrolment letter is not mandatory. BrightPay will remember each employee's letter status, i.e. whether or not they have received the letter.

This transfer also works when switching groups of employees (eg, directors group) within the same workplace pension provider. If a pension provider requires different groups for different contribution rates, for example NEST, you can easily transfer employees from within the same group. This is also useful if an employer makes a mistake when setting up the workplace pension scheme. Again, this transfer can be done for multiple employees or on an individual basis. When switching to a different group of the same workplace pension provider, there is no need to re-send enrolment information as BrightPay will remember the status of whether or not the enrolment file has been sent.

Visit the BrightPay website to find out more about BrightPay’s payroll and auto enrolment features & functionality.

 

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