It is now time for many companies to start undergoing their transition into automatic enrolment. However many larger organisations have already made the change and are there is plenty that can be learned from their experiences.
There are a number of possible issues to be aware of when transitioning to auto-enrolment, whether this is data management, stretched resources or problems with implementation. This blog gives you the chance to explore some of the key issues that employers, financial advisers and pension providers have faced with auto-enrolment so far:
Data management issues
Managing data and having clean, accurate data is crucial to auto-enrolment success. This is a major issue for pension providers and is important at both the initial stage and ongoing basis. Different IT systems and separate departments may be involved, which can lead to data discrepancies.
Ensuring key stakeholders are on board
Depending on the size of a business (numbers of people and departments) there are number of different responsibilities which can cover different functions, notably human resources, payroll and finance. The project manager must assign and agree clear responsibilities.
Capacity resource issues
There is evidence to suggest that pension providers and financial advisors (who want to be in the auto-enrolment market) are being stretched. This will become more apparent running up to 2017/18 with the huge influx in schemes.
Pension providers not quoting/fully quoting scheme terms
There is evidence that some pension providers will not quote at all on very low contribution schemes.
More than one scheme per employer
Employers may want/need more than one pension scheme. Reasons might include:
Some employers have used salary exchange (sacrifice) with their pension arrangements, which has helped reduce the financial burden on the employer pension contribution responsibilities; in return for the employee consenting to a reduction in their salary, the employer contributes to their pension.
Ensuring successful implementation
It is vitally important to allow realistic and sufficient time to complete the project of auto-enrolment successfully. A significant factor in companies not being ready was because they did not begin preparing early enough. A lack of time coupled with a lack of resources allocated to the project has delayed auto-enrolment implantation for some companies.
If you found this blog useful, check out the full CPD course on auto-enrolment written by Rob Weaver.
Data management issues
Managing data and having clean, accurate data is crucial to auto-enrolment success. This is a major issue for pension providers and is important at both the initial stage and ongoing basis. Different IT systems and separate departments may be involved, which can lead to data discrepancies.
Ensuring key stakeholders are on board
Depending on the size of a business (numbers of people and departments) there are number of different responsibilities which can cover different functions, notably human resources, payroll and finance. The project manager must assign and agree clear responsibilities.
Capacity resource issues
There is evidence to suggest that pension providers and financial advisors (who want to be in the auto-enrolment market) are being stretched. This will become more apparent running up to 2017/18 with the huge influx in schemes.
Pension providers not quoting/fully quoting scheme terms
There is evidence that some pension providers will not quote at all on very low contribution schemes.
More than one scheme per employer
Employers may want/need more than one pension scheme. Reasons might include:
-
Historical issues such as existing pension provision or worker categorisation
-
The chosen pension provider not accepting small contribution employees, eg low paid/part time workers
-
A diverse range of employees, for example meaning more than one scheme is needed to deal with different considerations, eg fund choice and eligibility period
Some employers have used salary exchange (sacrifice) with their pension arrangements, which has helped reduce the financial burden on the employer pension contribution responsibilities; in return for the employee consenting to a reduction in their salary, the employer contributes to their pension.
Ensuring successful implementation
It is vitally important to allow realistic and sufficient time to complete the project of auto-enrolment successfully. A significant factor in companies not being ready was because they did not begin preparing early enough. A lack of time coupled with a lack of resources allocated to the project has delayed auto-enrolment implantation for some companies.
If you found this blog useful, check out the full CPD course on auto-enrolment written by Rob Weaver.
You need to sign in or register before you can add a contribution.