How to Improve Profits with Auto Enrolment

Auto Enrolment
In 2012, the UK law on workplace pensions changed forever. By law, employers must now enrol their employees in a pension scheme and contribute towards that scheme. Every employer with at least one staff member now has new duties. These responsibilities include placing those employees who meet certain criteria into a workplace pension scheme where these employers, must also contribute towards the pension.

Employers are experiencing information overload when it comes to their new AE obligations. 1.2m small and micro businesses are set to start staging from June 2015. A large portion of these employers may lack the knowledge and resources to be able to process these AE tasks. Research by The Pensions Regulator reports that only 60% of employers due to stage between June 2015 and Nov 2015 have begun to plan for their Auto Enrolment duties, with a significant decline of 52% reported among employers due to stage in 2016.

The Opportunity
The big question remains, will you help your clients prepare for Automatic Enrolment?? Whether you are a payroll professional or accountant, this change to the law will mean that your payroll clients may come to you to seek advice on the easiest way to fully comply. Automatic Enrolment is presenting accountants with a unique opportunity to offer additional services to existing clients thus bringing in new business. If accountants decide they do not want to take on this type of work then they run the risk of losing business.
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Accountants will need to take time to consider the AE opportunity for their business. This AE platform presents a stepping stone for them to increase turnover, acquire new customers and build a lasting relationship with your current client base. To achieve this increased revenue, it will be essential that your payroll clients know that you are open for Auto Enrolment business. Make sure you have the correct tools and processes in place to streamline AE and increase profits. By taking the opportunity to identify payroll systems that reduce costs and resources and maintaining a strong level of best practice, then accountants will reap the rewards. It further provides a competitive edge to you over other accountants who refuse to provide AE as a service to their clients. Savvy accountants are already capitalising on auto enrolment and it has become a viable and profitable part of their practice.

Auto Enrolment Webinars
BrightPay has joined forces with Accounting for Growth to help accountants with payroll clients. The AE webinars are specifically tailored to support accountants in processing Auto Enrolment efficiently.

On the 24th March Patrick McLoughlin will present ‘Using Auto Enrolment to attract your Ideal Clients’ where he will give you practical and helpful tips to attract new business. Patrick’s presentation will help you to avoid the fee bargainers and focus on clients happy to pay premium fees for a premium service. Business owners are crying out for more information and help to comply with the legislation. You will never find a market more receptive to your support and services.

Paul Byrne from BrightPay will present ‘Embrace Auto Enrolment to increase Profits’. With the tsunami of auto enrolment staging dates ready to hit the UK’s small businesses, accountants are deliberating whether to embrace auto enrolment and whether it is worth the time and effort. Discover how all Bureaus can benefit financially from Auto Enrolment. Find out how and why AE should be a chargeable service.

Register today for our webinar to take the stress, hassle and pressure out of dealing with payroll clients.
Free Registration – Book your place here.
Written by Karen Bennett – BrightPay, auto enrolment software.

5 Auto Enrolment things you must do before Staging

Young woman with checklist over shoulder shot

If you are an employer you can’t afford to mess up Auto Enrolment, the penalties are harsh!

Even a small employer will need 6 months to prepare and larger employers could take up to 18 months.

So what do you need to do before you stage?

  1. Find out your staging date, this the date when your obligation under Auto Enrolment will start, the Pension Regulator calculator is a good place to start
  2. Nominate a person to be the Pension Regulators key contact and register their name with the Regulator
  3. Draw up a Project Plan and consider whether you need help (60% of companies currently staging have decided they do need help! and most businesses use a service like to help with project management)
  4. Choose a Pension Provider – Nest, Now Pensions and The Peoples Pension are the 3 largest
  5. Makesure your Payroll can provide the analysis needed

In addition you will need to work on elements of the Project Plan such as Assessing the Workforce, Letters to Employees, Considering Postponement etc

There is a lot to do and its complicated!



Will Temp Agencies avoid Auto Enrolment by using Postponement?

Pension background concept

The date workers are enrolled depends on the size of the company they work for and is being rolled out over the next six years (this is called a staging date).
  • Large employers (with 250 or more workers), have started automatically enrolling their workers and will continue to February 2014 (some employers may choose to start earlier)
  • Medium employers (50 – 249 workers) will have to start automatically enrolling their workersfrom April 2014 to April 2015
  • Small employers (49 workers or less) will have to start automatically enrolling their workers from June 2015 to April 2017
  • New employers (established after April 2012) will have to start automatically enrolling their workers from May 2017 to February 2018
  • Employers who chose to use Defined Benefit or Hybrid Schemes can delay their staging date until 30 September 2017

You can postpone the start of Auto Enrolment for up to 3 months and then re-test for eligibility using this method could mean that Temporary Staff Agencies could avoid Auto Enrolment for their temps. This also means that many agencies will use NEST because other pension schemes will not want to sign them up as they many not actually receive any contributions.

Pinsent Masons blogged:

Agency workers are different from other workers and so present particular challenges. Many are seeking work for only a short period. Many will register with a number of different agencies and will, in fact, only be ’employed’ by a particular agency for a short period. The auto-enrolment obligation applies to all workers who meet the age and earnings thresholds, but there are options which may assist those employing high churn groups of workers.

Employers can make workers wait up to three calendar months before enrolling them into a pension scheme. If the worker has left by the end of that three-month period, then there is no need to provide that worker with a pension.

If you do postpone, make sure you follow the rules otherwise there could be harsh penalties under the Pension Act 2008 Section 45

Offences of failing to comply(1)An offence is committed by an employer who wilfully fails to comply with—

(a)the duty under section 3(2) (automatic enrolment),

(b)the duty under section 5(2) (automatic re-enrolment), or

(c)the duty under section 7(3) (jobholder’s right to opt in).

(2)A person guilty of an offence under this section is liable—

(a)on conviction on indictment, to imprisonment for a term not exceeding two years, or to a fine, or both;

(b)on summary conviction to a fine not exceeding the statutory maximum.