Auto Enrolment: Are the Information Campaigns Actually Working?

Automatic enrolment is the biggest change to pensions provision in the UK for generations. Between 2012 and 2018, every employer in the UK will need to have a workplace pension scheme in place and start enrolling workers. Many will be automatically enrolled and others will need to be enrolled if they request it.

1.2 million employers are going to enrol 11 million eligible workers. A new generation of savers will start putting money into a pension – often for the first time.

Auto enrolment
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A payroll software company, dealing almost exclusively with small employers (less than 30 employees), recently conducted a customer survey on the subject of auto enrolment asking two key questions:

  1. Do you know what the term “staging date” means?
  2. Which auto enrolment provider do you intend to register with?

Although employers with less than 30 employees do not really have to worry about auto enrolment until 2015 (and beyond), the survey results revealed some interesting findings.

Staging date survey result

The staging date is the date on which an employer’s auto enrolment responsibilities commence. It is the date on which they must assess their employees and enrol those employees who fall within certain age and earnings criteria. There are various other actions which must be carried out for all other employees. It is an important date and employers need to ensure that their systems are compatible well beforehand and also must organise which pension provider they are going to enrol with.

It is an easy task to find out the staging date. Just visit the Pension Regulators website and key in the PAYE reference number.

Therefore, it was surprising that 50% of the survey respondents had no idea what the term “staging date” actually meant. Of those that knew its meaning, 20% had not established the actual date. Therefore, 60% of all respondents did not know what date their staging date fell on.

Auto enrolment provider survey result

A staggering 87.5% of respondents had not yet decided on which provider to use for their auto enrolment needs.

Given the importance of auto enrolment and the impact it will have on employers, the government has a responsibility to step up its awareness campaign.

Although auto enrolment is an imposition on employers and a cost (employers are obliged to contribute to their employees’ pensions), it is not necessarily something to be feared. A lot of payroll systems will make it very straightforward for employers to administer and most of the auto enrolment providers have also made their procedures very simple.

It is important that employers prepare well in advance of their staging date. The Pension Regulator will write to employers a year in advance notifying them of their staging date. The employer can also postpone their duties for a further 3 months. But, even this length of time may be insufficient if the employer’s systems are incompatible.

About the author: Paul Byrne FCA is the director of Thesaurus Software Ltd (producers of BrightPay and Thesaurus Payroll Manager). He co-founded the company in 1991 to provide payroll software to Irish businesses who were at the time struggling with manual systems. BrightPay is currently used by over 60,000 employers in Ireland and the UK. Paul is also the chairman of the Payroll Software Developers Association in Ireland.