24/02/2015

By Matthew Mitten, director of Enrolsme


Automatic enrolment is gathering momentum, as thousands of small businesses now work towards their compliance deadlines. 2015 starts to see the volume increase with 45,000 companies staging. But with 110,000 in Q1 of 2016 also to stage we may see the end of 2015 as the real crunch point.

A lot has been made of the success so far of automatic enrolment, but with only three per cent of the UK having staged there is some way still to go.
Will providers and advisers have the ability to cope with the sector's automatic enrolment needs (and demands)? Only time will tell, and - at this stage - I firmly believe that technology will have a major part to play in supporting the small business sector with this compliance challenge.

A lot of automatic enrolment technology has come on to the market. Most
(notable) organisations claim to have a solution, but often they can only support the organisation through part of the process. I'd argue that - so far - a gap has existed for a better end-to-end solution...

Traditionally, when it comes to pension support, companies have relied on consultants to get them the best pension and liaise directly with the pension provider on their behalf. There are a lot of manual processes - including the set up, implementation and ongoing monitoring.

A good technology solution will remove all of the manual work. Where providers have to cater for every possible scenario (e.g. pension schemes and payroll providers) - their software can be complex. Most companies will just need a simple solution, which they can effectively plug in and play, without all the complexity. Technology can be a real winner - where it is simple and can cater for all needs at a relatively low cost. It should also take up as little time as possible - not interfering with the daily running of the business.

We’re finding that companies still need help at the beginning of the automatic enrolment process, especially if this is the first pension scheme they have ever set up. A lot of the language is new to them and it can be confusing. A certain level of education and understanding is crucial, but it’s difficult to balance that with keeping it simple and free of pension jargon. For me, this is the challenge for technology, taking a complex subject and making it clear and easy to understand but without the help of an adviser to talk to or walk them through it.

People can be afraid of technology, people are also afraid of pensions. The challenge is to help people realise there is no reason to be afraid, but only if we can make it simple for them to use and understand from beginning to end.