If your staging date for auto enrolment of pensions is due over the next year, you will no doubt be starting to consider whether you want to manage auto enrolment pensions yourself, or outsource it to a provider.
With over 40 years of experience in auto enrolment pensions in Oxfordshire and the surrounding areas, we consider ourselves as seasoned experts. In this blog, we weigh up the pros and cons of each option and discuss what to consider if you decide to outsource your auto enrolment hassles to a specialist provider.
Do it yourself
The main advantage of setting up and running your auto enrolment pension scheme in-house would be to reduce costs. However, there are hidden costs on carrying out the work yourself. These include the time involved in getting to grips with your duties, retraining of your staff and the upgrading of payroll software with auto enrolment bolt ons.
There is very good guidance provided on the Pensions Regulator website but this runs to over 250 pages and many employers find that their time is better used focussing on their businesses. Staff who are confident in running the payroll may not have an understanding of pensions and don’t want to get involved.
Payroll software companies are charging extra per month for auto enrolment functionality and many pension providers are charging more if you are running auto enrolment pensions without the help of a Payroll Bureau such as Critchleys HR and Payroll.
The consequences of getting things wrong could be expensive as the Pensions Regulator can issue a penalty of £400 for the first mistake and escalate penalties by £50 per day (for 1 – 4 employees) and £500 per day (for 5 to 49 employees).
Outsourcing to a specialist
If you decide that you want someone to set up and run your auto enrolment pensions in Oxfordshire, then the following 7 points should be considered before choosing a provider:
1. Will the provider explain my duties to me and simplify the pension decisions I have to make?
At Critchleys HR and Payroll, we will completely support you in your duties. We will take you through a simple checklist and explain the implications of the financial decisions you are making about the pension you will be offering your staff.
We recommend that employers attend our free auto enrolment seminar to get an overview of the process. This is open to all employers whether or not we work with you, now or in the future.
2. Will I have a choice of auto enrolment pensions or is there only one option provided?
We are working with the three main master trusts (People’s Pensions, NEST and NOW Pensions) who are accepting all companies for auto enrolment pensions, irrespective of size. Our software can provide auto enrolment pension reports for all of the major pension providers.
3. How long will it take to set up my auto enrolment scheme?
At the moment, we are able to set up your scheme within a matter of weeks. All we require is a small amount of your time to go through the checklist with you so that you can make informed decisions about the set up of the scheme. We do the rest of the set up for you, from setting up your pension with the provider, informing the Pensions Regulator of your compliance and setting up our payroll to manage the assessment process each month or week, depending on your pay period.
(Please note that our Oxfordshire based auto enrolment services are not regulated by the FCA and therefore cannot advise you on the suitability or otherwise of a particular pension scheme. However, we can advise on which providers are working best from a technical and administrative point of view.)
4. Can I set up auto enrolment pensions well in advance of my staging date?
Yes, our auto enrolment services in Oxfordshire can help set up your scheme, years in advance of your staging date. There is no need to contribute to the scheme until your staging date or until the end of your postponement period. (If you do want to start paying early, you need to give one month’s notice to bring your staging date forward).
We’d advise employers to get organised now. There will be around one million small businesses looking for help during 2016 and 2017. All service providers have a limited number of staff and will be unable to guarantee help if clients leave things to the last moment. We have noticed that Pension Providers have started to increase their charges as the demand for support outstrips the supply. So don’t wait for your staging date or you may get trampled in the rush!
5. How experienced are the provider’s staff in operating auto enrolment?
Make sure that the company you are using to advise you on auto enrolment set up and ongoing management are experienced in pensions and payroll. Beware of new companies who see auto enrolment pensions as a short term business opportunity and have taken on inexperienced staff.
At Critchleys we have over 40 years of experience in running payrolls and have qualified staff on hand to help you with auto enrolment pensions in Oxfordshire and the surrounding areas.
6. How will auto enrolment pensions affect the running of my payroll?
Payroll software can be used to assess your staff on each pay run and provide pension output files for uploading. If different providers run your payroll and assess your staff for auto enrolment, you will add an additional stage in your payroll timescales. You will need to liaise between your payroll company and your pension company which takes management time.
We have integrated payroll and auto enrolment systems, so that we can provide a seamless and efficient service. This is particularly important if you have weekly run payrolls which have tight timescales for turnaround.
7. How cost effective is the service?
Make sure that you ask the provider about the cost of auto enrolment pensions set up and ongoing assessment of your staff. Auto enrolment pensions have been seen by some as an opportunity to charge large sums to confused employers.
We have a one off set up fee irrespective of size of workforce and charge a small admin fee each pay run for the auto enrolment assessment. Please contact us to find out more about how we can help with auto enrolment pensions in Oxfordshire. We believe we are offering one of the most cost-effective solutions available to local employers.