By Michelle Ginnelly, MCIPP, Carval

Until recently auto enrolment (AE) only affected the largest employers in the UK. However over the next year or so the smaller businesses that make-up the bulk of employers in the UK will be reaching their pensions auto-enrolment staging dates. In this article, I will offer advice when dealing with third parties during the AE process.

You’ve probably already started thinking about AE, as you reach your staging date between now and 2017. Many of you will be using payroll bureaus and accountants to help in what can be a complex process. Good payroll software, whether used by your company in-house, or that used by your accountant or payroll bureau, often provides the tools to carry out the auto-enrolment assessment process. Alternatively your pension provider may offer this service. However you may also choose to use a third party to either assess your employees or to deal with employee communication. Experience has shown us that this can be a potentially problematic area for a number of reasons.
Here are some tips on working with auto-enrolment intermediaries and third parties.

1) Beware of miscommunication

If you involved a third party, be careful that all communications are shared three ways, between your payroll bureau/accountant, your in-house HR/payroll/finance/admin department and the third party. Ensure that all phone conversations are fully documented so that there is no miscommunication surrounding responsibilities, data requirements and deadlines.

2) Ensure data requirements come directly from the pension provider

Each of your pension providers will have a detailed specification as to how they need to receive information regarding pension contributions. This will include:

• the file format
• the headings
• the date format
• naming conventions and more.

Ensure that you get this information directly from your pension provider rather than from an intermediary. Providers do change their specifications from time-to-time and third parties are not always kept in the loop.

3) Account for payroll time delays if a third party is running assessments

If a you want a third party to assess your employees, you will need to think about your payroll processing timetable, as it can take several days for the assessment to take place and for the relevant data to be returned. There are some pension providers that are an exception to this where you can get live results, you import the data onto a website and get an immediate return on it.
Weekly payrolls can pose a particular problem as the turnaround is tight, so to add a third party into the mix can make it almost unworkable. You need to think about this.

While there is still plenty of time for the smallest businesses, it’s a good idea to plan ahead to ensure things run smoothly, because as we all know, payroll isn’t mission critical, until of course it goes wrong! Not paying your staff on time simply isn’t an option for most businesses.