Posted by

Lynn Graves, Head of Business Development, Scottish Widows

17 Feb 2015

Every employer needs to have auto enrolled their eligible employees by the end of 2018. Over the last two years larger employers have paved the way and now many smaller employers are quickly following in their footsteps. Being compliant, following the processes on time, correctly and maintaining detailed records are all important to avoid falling foul of the regulator so many employers use software to help them fulfil their duties.

There are lots of potential solutions out there, whether they will work for your business is the key so take some time to think about what your needs are.

Software solutions are there to help manage your new processes. Auto enrolment, like payroll, is another process that you need to manage. The right solution could help you automate a lot of your legal duties, like making assessments, holding records, knowing when an employee should be auto enrolled and communicating to your employees.

Any solution needs to work around your payroll processes, or better yet, work alongside them. You already need to assess, make deductions and manage employee pay so you may want to avoid adding too many additional processes to your regular pay-run, and rather use this as an opportunity to simplify. The better payroll and auto enrolment processes integrate, the easier this can be for your business.

Some providers have developed software, and there are also some standalone platforms available, often termed ‘middleware’ as they sit between payroll and pension provider. Middleware can help gather data from complex payroll and HR systems and offer a clear audit and management process for employers. They can also prompt you to send the correct communications at the right time to your staff. This kind of functionality is often built into these platforms but you may be charged extra for it, so do check with the provider.

When considering your options it’s important to understand how well the solution communicates with your pension provider. Some larger employers have found it challenging to balance the needs and software capability of their HR, payroll and pension providers so spending the time to understand what their needs are can help you get this right first time. Or if your set-up is mainly managed in the business, this could be a great opportunity to outsource some of your existing processes. 

If you do use third party software, keep in mind that the providers might need time to build a solution, so start planning as early as possible to ensure you meet your compliance deadlines. The tight timescales for deducting contributions and investing mean that you could be delayed if you don’t leave enough time, which could lead to you being fined.

Whether you plan to manage auto enrolment yourself or to get some help, ensuring that your processes are timely, compatible and effective is the key.