It is getting nearer to the time when your clients with less than 50 employees will receive a letter from The Pension Regulator reminding them of the need to plan for Auto enrolment. It's a bit of a lottery as it depends upon the client's PAYE reference. The unlucky ones will receive a letter this June as the first staging date for this sector of employers is June 2015.
Some of your clients will be going to an IFA who will provide a solution to the client but many may not want to do this for a variety of reasons. Even if your firm does have an IFA arm, the client may not want to use this service. So what are you going to do?
You may consider doing nothing. 'We don't do pensions' may be the cry but 90% of Auto enrolment is not about pensions; it's about administration of the payroll. Decisions about whether pension contributions are payable, the amount of contributions and total pension contributions payable to the pension scheme are just like decisions about whether PAYE and NI deductions are required and global payment of these to HMRC. If you provide payroll services this presents a potential opportunity to enhance to extend the range of services you provide to clients. By making clear to the client how you can help him through the Auto enrolment process, you will consolidate your relationship with the client by running Auto enrolment as part of the payroll services being provided.
What you can't do, of course, is provide financial advice. It's down to the employer to choose an appropriate Auto enrolment scheme. However what you can do is to make him aware of the three main schemes which have been specifically set up with Auto enrolment in mind. The schemes are:
- NEST - a non-departmental public body set up by the Government which must allow an employer to register with it.
- Now Pensions - new to the UK but with over 40 years' experience in running a low cost auto enrolment scheme in Denmark.
- The People's Pension - also new but administered by B&CE, managers of the largest stakeholder pension in the UK.
Depending which one he chooses, he will find they go some way to helping him in the run up to the automatic enrolment of employees. And once he has chosen a scheme, you will be able to help in the run up if you wish. For example, NEST has established 'delegated access' which allows employers to delegate all or part of the administration of the scheme to someone else. See here
Now Pensions has an advisor toolkit which allows an accountant to provide some or most of an Auto Enrolment service to employers. It also has a tool designed to help a provider of payroll services to manage Auto enrolment on behalf of clients. See here
The People's Pension has an 'Employer Assistance Program' which guides an employer (or his agent) through the Auto enrolment process. See here
How much help you want to provide is a policy matter for your firm but it would appear that the three low cost pension providers above are keen to promote a user friendly approach to employers and their accountants (and let's not forget, a user friendly approach for employees).
How Mercia can help you
Our view is you would want to offer the following services:
- tell the client how you can help (and why he needs help)
- give information on the cost implications of Auto enrolment, including ways in which the costs can be managed
- advise the employer which letters need to be sent to which employees at the right time
- run Auto enrolment as part of a payroll service which will include, at a minimum, checking eligibility status of employees, calculating pension contributions and advising on payments to the pension scheme.
How Mercia can help you do this is:
|Services to your client||How Mercia can help you||How others can help you|
|Tell the client how you can help (and why he needs help)|
|Giving information on the cost implications of Auto enrolment, including ways in which the costs can be managed.|
|Advising the employer which letters need to be sent to which employees at the right time.|
|Running a payroll service|
Details of when our product/services will be available are shown on our web site - HERE.
Please get in touch if you have any queries.