Auto Enrolment - Are your clients ready
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The webinar covered auto enrolment responsibilities for small employers and how accountants and payroll bureaus can help clients and earn more. It discussed that small employers lack in-house expertise for auto enrolment and will likely turn to advisors. Offering auto enrolment support can generate new business and monthly retainers. Attendees learned how to review payroll systems to ensure they can automate and streamline auto enrolment duties. Educating clients on defining their workforce and communications is important for compliance. Modern solutions like BrightPay can automate tasks to save time and money.
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Auto Enrolment - Are your clients ready
- 1. The webinar will begin shortly... Auto Enrolment: Are Your Clients Ready? How to price so you can earn more and work less By Paul Byrne By Steve Pipe
- 2. By Paul Byrne Auto Enrolment: Are Your Clients Ready?
- 3. How to price so you can EARN MORE and work less Steve Pipe FCA
- 6. 460
- 8. Q&A Session Questions Tab or #BPWebinars Competition Two BrightPay 2015/16 bureau licences On Demand This session is being recorded REC Q&A WIN
- 9. Auto Enrolment: Are Your Clients Ready?
- 10. • Accountancy Practice for 20 Years • Payroll software development • Expanded into the UK – BrightPay & Bright Contracts • 80,000 employers across the UK & Ireland use our products Paul Byrne
- 11. • Auto enrolment overview • Small employers – ripe for the picking • Auto enrolment – a chargeable service • Value proposition for your clients • Review existing payroll systems • Understand & educate your clients Agenda
- 13. Auto Enrolment Overview • Auto Enrolment is a vast subject • Pensions Act 2008 • All employers must automatically enrol eligible jobholders into a workplace pension scheme
- 14. Entitled Workers Non Eligible Jobholders Eligible Jobholders Auto Enrolment Overview
- 15. Eligible Jobholders • Aged between 22 and State Pension age • Earn more that £10,000 per year • Work, or ordinarily work, in the UK Auto Enrolment Overview
- 16. 1. Set up a pension scheme 2. Assess employees 3. Communications 4. Ongoing duties 5. Declaration of Compliance Auto Enrolment Responsibilities
- 17. 60,861 Employers completed declaration of compliance 1,800,000 Employers who have yet to reach their staging date Auto Enrolment Overview
- 19. Small Employers: Ripe for the Picking
- 20. Small and Micro Employers • Large and medium employers: HR personnel to help with auto enrolment • Small and micro employers: lack of in-house expertise • Majority of employers yet to stage will not have the knowledge or experience to make informed AE decisions
- 21. Small and Micro Employers • Information overload - confused, bewildered and overwhelmed • Expected that 78% of these will turn to an accountant, bookkeeper, or payroll bureau for advice and counsel • Gift wrapped business opportunity
- 22. Auto Enrolment – A Chargeable Service
- 23. • Are you ready or prepared to take on auto enrolment business? • What level of support / information will you offer? • Are you prepared for employers coming to you last minute? Auto Enrolment – A Chargeable Service
- 24. • Payroll bureaus must predict the evolutionary need of their clients • Establish yourself as a proactive rather than a reactive AE advisor • Necessary level of service for an initial set up fee plus a monthly retainer Auto Enrolment – A Chargeable Service
- 25. • By offering a complete end to end solution, bureaus can generate income and enhance client relationships. • If you offer other services, auto enrolment will provide a new platform to reach and upsell to. • Employers will be happier to consolidate all their outsourced services to one person or advisor. Auto Enrolment – A Chargeable Service
- 26. Value Proposition for Your Clients
- 27. Value Proposition for your Clients 1. Time saving 2. Cost saving 3. Focus on core areas 4. Expertise
- 28. Review Existing Payroll Systems
- 29. • Choose payroll software that is specifically tailored to auto enrolment • Handle all the necessary employer duties • The speed of automation offers significant cost savings to bureaus • Some payroll software can streamline auto enrolment process and allow you to make a profit Review Existing Payroll Software
- 30. Does Your Payroll Software… 1. Assesses your workforce automatically? 2. Allows the use of postponement? 3. Customise employee communications? 4. Calculate and deduct pension contributions? 5. Handles opt-in and joining?
- 31. Does Your Payroll Software… 6. Handle opt outs and refunds? 7. Notify you when actions need to be taken? 8. Keep records and provide reports? 9. Integrate with various pension providers? 10. Provide free support?
- 32. Understand and Educate Your Clients
- 33. • Mutual understanding of auto enrolment service offering • What auto enrolment duties are you willing to fulfil and how much will this added service cost? • A tiered pricing system provides a menu of options for clients to choose from • It is vital that both parties understand who is responsible for each of the different auto enrolment duties Understand and Educate Your Clients
- 34. Understand Your Clients Workforce
- 35. • Employers are required to provide workers with a range of information depending on their worker category – Eligible jobholders – Non-eligible jobholders – Entitled workers – Postponed employees • The right person, the right information, the right time Educate Your Clients Workforce
- 36. • Payroll software / pension provider can provide the communications for you • Easily produce an interactive and personalised letter to provide your clients with the relevant communications • TPR: employer duties and defining the workforce (PDF, 163kb, 28 pages) Educate Your Clients Workforce
- 37. 5 Considerations to Improve Profits 1. Engage with Clients 2. Avoid Penalties 3. Expertise 4. Payroll Software 5. Increased Revenue
- 38. • Engage with clients who have not yet staged • Find out clients’ staging date – http://bit.ly/1EuooiJ • Be proactive – let clients know that you are open for AE business • Communicate AE service offering & pricing • Risk of losing some or all of your payroll clients 1. Engage with your Clients
- 39. • The Pensions Regulator continues to enforce fines and penalties for non-compliance • Compliance Notices – 1,295 • Fixed Penalty Notices – 332 • Not allowing enough time to plan could lead to your clients being fined 2. Avoid Penalties
- 40. • Bureaus can position themselves as available for AE business • Clients outsource to you because you have the know-how and it saves them time and money. • Trusting you as a payroll professional to make sure they are fully AE compliant with the law. 3. Expertise
- 41. • Ensure AE Functionality for the success of AE. • Payroll software can provide the necessary functions to automate the employer admin tasks. • The Pensions Regulator urges bureaus and employers to check with their payroll provider. • Ensure that it supports the requirements of AE. 4. Payroll Software
- 42. • A number of advantages to offering AE as a Service. • By offering AE as a chargeable service, bureaus can: – Enhance client relationships – Add additional revenue streams – Provide added value to your existing clients – Bring new clients on board – Benefit from a competitive edge 5. Increase Revenue
- 43. • Modern innovative solutions exist that can automate AE duties • Auto enrolment communications • BrightPay – integrated payroll and auto enrolment solution • Allow you to streamline auto enrolment, saving time and money Streamline Auto Enrolment
- 45. How BrightPay Handles Auto Enrolment
- 46. How to price so you can EARN MORE and work less Steve Pipe FCA
- 48. Monday 2nd November @ 11.00 am https://www.brightpay.co.uk/events/1020/ Auto Enrolment: 7 Steps to Profit with BrightPay By Paul Byrne Auto Enrolment: Collaboration is the Key to Success! By Darren Critten
- 49. @BrightPayUK 60 Day Free Trial sales@brightpay.co.uk Switch Today To Get 50% Discount * Phone 0845 3004 304 or email sales@brightpay.co.uk and quote: “Webinar50” Bureau Licence £199 + vat per year • Unlimited employers • Unlimited employees • Free support • AE functionality * Offer applies to new customers who switch to BrightPay from another payroll software provider for the first year subscription only. This offer applies to BrightPay 2015/16 bureau licence only and does not work in conjunction with any other offer.
- 50. • HMRC Basic PAYE Tools users can now get 50% off when you switch to BrightPay* – Unlimited employees = £89 Now £44.50 – Up to 3 employees = FREE • BrightPay now has HMRC Basic PAYE Tools import facility * Offer applies to new customers who switch to BrightPay from HMRC Basic tools or another payroll software provider for the first year subscription only. This offer applies to BrightPay 2015/16 employer licence only and does not work in conjunction with any other offer.
- 51. 99.3% Customer satisfaction rate 99.5% Describe interface as user friendly 98.8% Would recommend BrightPay 98.5% Satisfied with Customer Support
- 52. A preferred supplier of TaxAssist Accountants “The BrightPay user interface is superb and makes data capture painless.” “The language used is easy to understand and minimises the use of payroll jargon.“ Accredited by ICB - Read here Shortlisted for five awards at Payroll World Awards
Editor's Notes
- Later Steve Pipe will be revealing the keys to pricing so that you can earn more and work less. And that really is an unmissable session because Steve has dedicated his life to helping accountants get better results for themselves and their clients …
- He is the founder of the 250 strong AVN association of accountants and the not for profit “Accountants Changing The World” movement. He is also…
- … the author of many Amazon 5 star rated books – which the likes of the President of The ICAEW describe on the dust covers as “Brilliant”. And…
- … his 460 recommendations on LinkedIn make him the most highly recommended accountant in the world. While his 12 major business awards include being named by Accountancy Age as the “UK Entreprenuer Of The Year”. And…
- … being shortlisted a couple of months ago by AccountingWeb for their first ever “Outstanding Contribution to Accounting” Award.
- I am delighted to announce that we have a free competition today. There are two BrightPay bureau licences up for grabs. All attendees who stay for the entire webinar will be entered in a free competition to win a free Bureau Licence. We have two 15/16 BrightPay licences to give away. 2 Attendees will be chosen at random and the winners’ details will be emailed to all attendees. There will be a Q & A slot at the end of the webinar and if there any questions not answered in that slot we will email the answers to all attendees later today.
- Hi everyone and thank you for joining us today. Just a small bit about myself to start off…
- My background is as a practising accountant. I started my own practice back in the 80s and eventually grew it to a 3 partner practice with 10 staff. While in practice, I provided payroll bureau services for about 30 clients so I have some idea what it is like in the front line. In 1992, I got into payroll software development - A large part of my reasoning for this was make better software than what I was using at the time. Eventually, I began working in software development full time, allowing us to focus on a wider range of software packages and expand into the UK. Eventually, we introduced BrightPay and Bright Contracts in both the UK and Ireland. However, I can’t claim full credit for BrightPay, as it is written by someone younger and better than I (my fellow director Ross Webster). Today, 80,000 employers across the UK and Ireland use our products, a figure that we are improving on every year.
- So, here is the agenda for my slot today which I hope you will find useful and give you plenty of food for thought. When talking I will often refer to Auto Enrolment or Automatic Enrolment simply as AE. For those of you who have tuned in to any of our previous webinars, apologies if I end up repeating some of the points previously made. Unfortunately, this is unavoidable.
- OK, a quick recap on what AE means and just to note that this is only a summary. AE is a vast and complex subject. It would take days (even weeks) to cover the subject properly. At the end of the day, you should not need to have an in depth knowledge of AE. It is up to your pension provider and payroll software provider to filter out all the noise for you. The workplace pension reforms (automatic enrolment) are set out in the Pensions Act 2008 and were introduced in October 2012. All employers are required to offer a workplace pension scheme to their eligible workers. AE is being rolled out in stages across all employers, and started with the larger employers in October 2012. By October 2018 all employers will be required to offer workplace pension schemes to eligible workers. Large employers became subject to the duties (i.e. reached their staging date) between October 2012 and February 2014, and medium employers between April 2014 to April 2015. From June 2015, small and micro employers will begin to reach their staging date.
- What AE actually means for an employer is that, from their staging date (or from their deferred date if they are using postponement), all eligible jobholders must be automatically enrolled. All employees must be assessed to determine whether they are eligible jobholders, non eligible employers or entitled workers.
- Eligible Jobholders Eligible jobholders are those who: are aged between 22 and State pension age, earn above the earnings threshold (currently £10,000) and work in the UK. All other employees are either non eligible jobholders or entitled workers and they can choose to join the workplace pension scheme. In summary, Auto Enrolment is something that is optional for the employee but mandatory for the employer.
- With AE comes a number of employer responsibilities: A pension scheme must be set up with a qualifying pension provider and this should be done in advance of your staging date. This should not require a great deal of time, for example registering with NEST should take only 30 minutes on average to complete. Next, the workforce must be assessed at your clients staging date and all eligible jobholders must be automatically enrolled into a workplace pension scheme, unless they are using postponement. All employees must receive communications within 6 weeks of the staging date, not just those who hove been enrolled. You must notify eligible jobholders, non eligible jobholders, and entitled workers including those who have been postponed of AE and how they have been affected. Apparently, some employers believe that if they choose to postpone all employees for 3 months at their staging date, then nothing needs to be done in that 3 month period. This is not the case as all employees must receive a communication within 6 weeks of the staging date relating to the postponement and explaining when they will be enrolled. If this communication is not issued then the postponement effectively never happened and enrolment must be completed retrospectively back to the staging date which will in itself be a nightmare. There are also a number of ongoing employer responsibilities such as handling opt outs (and opt ins), making deductions and contributions, monitoring employees each pay period, and sending a contribution file to the pension provider. Employers, or you on their behalf, must complete a Declaration of Compliance within 5 months of the staging date to notify the Pensions Regulator that they have complied with AE.
- By the end of September this year, over 60,000 employers had completed their declaration of compliance, enrolling 5.4 million eligible jobholders into a workplace pensions scheme. The Pensions Regulator estimates that, over the next three years, around 1.8 million small and micro employers will need to act as a result of AE duties.
- You will see from the slide that January 2016 is when the bulk of small and micro employers start to stage. This is the start of the so called tsunami and things will definitely heat up from there on.
- A lot of the companies staging before now will probably have had their own HR people to help them through the enrolment process. The vast majority of those staging from January 2016 will have no in-house expertise. The majority of these employers will not have the knowledge or experience to make informed decisions when it comes to their AE obligations.
- With the vast quantity of information available, employers are fast becoming confused, bewildered and overwhelmed. The Pension’s Regulator estimates that 78% of SMEs will turn to an accountant, bookkeeper, or payroll bureau. So, you have a gift wrapped business opportunity! And this is business you don’t have to go chasing.
- Payroll bureaus need to decide if they are ready to take on AE business. With many shying away from offering this as an extra service, bureaus will need to determine what kind of information and support they will offer to help their clients comply with these new AE duties. Advisors will find that a large portion of employers will contact them very close to or even after their staging date. If a client does contact you after their staging date and has done nothing, if their staging date has passed by less than 6 weeks, get them to issue postponement letters to all employees immediately. Otherwise they will need to backdate AE back to the staging date.
- Payroll bureaus that want to succeed in this competitive industry will need to predict the evolutionary needs of their clients. You need to establish yourself as a proactive rather that a reactive AE advisor. Bureaus will naturally increase their income by providing this service in exchange for an initial set up fee plus a monthly retainer to manage the on-going AE duties or an increased price per payslip. One bureau client mentioned to me that for a 15 employee client, they had charged £400 for handling staging and upped the price per payslip by 50% to cover ongoing monitoring and assessment. Apparently, the client was delighted.
- By offering a complete end to end solution, bureaus can generate income and enhance client relationships. If bureaus offer other services such as bookkeeping, tax returns, audits, management accounts, etc. they will have a new platform to reach and upsell to this new audience. You will find that employers will be happier to consolidate all their outsourcing services to one person or advisor.
- There are a number of benefits for your clients who outsource to you for auto enrolment: Time There will be significant time savings for your payroll clients. By outsourcing AE to a payroll professional, your client can avoid investing huge amounts of time researching how to comply with AE. The implementation of AE could also be very time consuming if your client doesn’t have the correct technology or software in place to automate a lot of the AE admin tasks. Cost Time is money as the saying goes. Without your help your payroll clients might choose payroll software that doesn’t have AE functionality. Even if it does some payroll providers are charging an additional charge for AE functionality and a further charge to support your clients through the process. With a bureau your client can avoid costly mistakes and save time that otherwise would have been taken out of their normal working week. Focus on Core Areas Especially for small and micro employers their time is extremely precious. Time away from their business is money. Outsourcing AE to a payroll professional frees up their energies and enables them to focus on the core areas of running their business. Expertise Implementing AE may require skills that staff do not possess. Outsourcing will provide a level of continuity to the company while reducing the risk of possible non compliance.
- While there is no legal obligation to have software in place, The Pensions regulator encourages employers to use an integrated payroll and AE solution that can automate employer duties and simplify the AE process. It is important that payroll and AE software can handle all the necessary employer duties and you should test it well ahead of your staging date, to make sure it works. Some payroll software provide auto enrolment functionality that can be tedious and time consuming, while other providers offer a streamlined solution that will automate AE duties. For large, repetitive or time sensitive tasks, the speed of automated AE offers significant cost savings to bureaus. This will be especially relevant when these employers approach their bureaus close to, at, or even after their staging date. By making sure that your payroll software does the following functions it will allow you to streamline your processes and start making a profit from AE.
- To check, ask your payroll provider the following questions. Does your payroll software: assess your workforce allow the use of postponement automate employee communications calculate pension contributions handle opt-ins and joining
- handle opt outs and refunds Notify you when actions need to be taken keep records and provide reports integrate with some or all pension scheme provider systems provide free support If you are selecting new software, you should ensure that it is compatible with your existing systems.
- It is extremely important that you communicate with your clients so that there is a mutual understanding when it comes to your auto enrolment service offering. Firstly, be proactive and communicate with your clients. Let them know what auto enrolment duties you are willing to fulfil and the additional fees that will be required for the added services. An idea is to have a tiered pricing system so that your clients can have a menu of options to choose from. When a client decides to utilise your auto enrolment services, it is vital that both parties understand who is responsible for each of the different auto enrolment duties.
- To help your clients with auto enrolment it is important that you understand their workforce. You must understand the different types of worker, what defines them, and what your client must do for each type of worker under AE. Some employers may want to raise general awareness among their workforce about AE before staging and may turn to you for assistance with this.
- There is a range of information that employers are required to provide to their workers, depending on their worker category. Each employee must receive particular communications about how AE affects them, as well as making sure the right person gets the right information at the right time, e.g. if they change worker category. For example, an eligible jobholder must receive a letter telling them that they have been enrolled and their enrolment date, their contribution rates, their option to opt out, and general information about how auto enrolment affects them. On the other hand, non-eligible jobholders and entitled workers must be informed of their right to opt in or join the scheme, while postponed employees must be notified and given the date when they will be reassessed for auto enrolment.
- TPR provides poster templates, articles and other sample materials that can help with this. Your payroll software should also be able to streamline the communications for you. Depending on the pension scheme being used, the pension provider may also handle the communications for you Some payroll software allow you to easily produce interactive and personalised letters to provide your clients with the relevant communications for their workers.
- If you have payroll clients, there are five important things to consider which will improve profits and increase the turnaround of payroll clients: engage with your clients, avoid penalties, expertise, Payroll Software and Increased Revenue.
- Engage with your Clients Advisors will find that a large proportion of their clients will contact them very close to or even after their staging date. It is important to engage with small and micro employers that have not yet staged to help reduce the number of latecomers. The first thing to do is to find out your clients’ staging date in order to start planning accordingly. It is possible to look up your clients staging date on The Pensions Regulator's website, if you have their PAYE employer number. You need to be proactive and notify these clients that you are open for AE business. Communicate your service offering and price it with your clients so that they know who will be responsible for each task. Be aware, that if you decide not to process AE, there will be a risk that you will lose some or all of your payroll clients.
- Avoid Penalties The impact of AE will affect your clients business now and for the foreseeable future. The Pensions Regulator continues to enforce fines and penalties for non-compliance. Up to June this year, The pensions regulator has issued 1295 compliance notices and 332 fixed penalty notices. Not allowing enough time to plan could lead to your clients being fined. By planning ahead, it will allow you, on behalf of your clients, to avoid hefty penalty fines.
- Expertise You do not need to have an in depth knowledge of AE. However, by understanding employer AE obligations, a bureau can position themselves as an authority figure who is open for AE business. Employers outsource their payroll processes to you because you have the know-how and it saves them time and money. Today, with AE, it is not only about cutting costs for employers but trusting you as a payroll professional to make sure they are fully AE compliant. Furthermore, some employers may not have the competency, time or know-how to handle AE themselves.
- Payroll Software - Ensure AE Functionality Payroll software will play a vital role in ensuring the success of AE. Without the appropriate systems, bureaus will need additional time and resources to cope with AE. Payroll software can provide the necessary functions to automate the employer admin tasks. You will need to know which employees need to be automatically enrolled and which employees have the option to opt in. Payroll software can access employee pay and other information so as to establish who will be eligible, non eligible or entitled. The Regulator further urges bureaus and employers to check with their payroll provider to ensure that it will correctly identify the duty you have for each employee and to see if the system will support the requirements of AE.
- Increase Revenue AE is presenting bureaus with a unique platform to increase profits. There are a huge number of small and micro employers due to stage between now and 2018. It will be important to capitalise on this window of opportunity. By offering AE as a chargeable service, bureaus can add additional revenue streams, provide added value to existing clients and increase the possibility of bringing new clients on board. It further provides a competitive edge to you over other bureaus that refuse to provide AE as a service to their clients.
- Fortunately, modern innovative solutions exist that can automate AE chores. Armed with the employer staging date, bureaus can now simply enter the date to assess each employee’s eligibility for AE at the staging date. Good payroll software will further handle all employee AE communications based on each employee’s individual eligibility. For example, BrightPay is an integrated payroll and AE software solution which allows you to streamline AE, saving you both time and money
- With BrightPay you can benefit from unlimited employers, unlimited employees, auto enrolment functionality, and free phone and email support, all for just £199 plus vat per tax year. You can also benefit from a 60 day free trial which has no limitations to the software.
- I would now like to hand you over to Rachel for a quick demo showing you just how easy auto enrolment can be with BrightPay. In this example we are assuming that the employer (or you on their behalf) has already registered with a pension provider, in this case NEST. Registering with NEST should take only 30 minutes on average to complete. Over to you Rachel.
- Before I pass you over to Steve Pipe, if you did have any questions in relation to BrightPay and AE please type them into the chat bar now so we can get through as many questions as we can in the Q & A session. I'm delighted to pass you over to Steve, who will present How to price so you can earn more and work less.