Getting ready for the rollout is too complex and multi-layered to be left to just one department.
It will require close collaboration between payroll, HR, and finance, as well as help and support from the payroll software provider or partner.
Only a joined-up approach will set up organisations for a smooth transition, enabling them to limit disruption, control costs, and guard against the risk of damage to reputation and employee relations.
In this section, we outline actions for:
Payroll teams
HR department
Finance teams
Payroll and HR software provider
The payroll department will naturally take responsibility for the provision and processing of accurate data on pay, and for deducting the correct contribution amounts for both employees and employers.
This will be an ongoing responsibility. Over time, the statutory minimum contributions will increase, and individual employee salaries will change. Payroll needs to stay abreast of all changes and make all necessary adjustments to ensure ongoing compliance.
The contractual and communication aspects of preparation should be shouldered by the HR department. Employment contracts will need to be updated to reflect the new pension arrangement.
But well before that, employees must be fully informed of the impending scheme, with a clear explanation of how it will affect them, and what their options are. One ‘communications blast’ will not be enough; this calls for an ongoing communication plan. HR may also coordinate employee opt-outs.
Forecasting and budgeting for the auto-enrolment scheme falls under the purview of finance. They may work with HR colleagues to survey employees and get an indication of likely opt-out levels, for a more accurate indication of costs.
Aside from contributions, administrative expenses must be considered. Will there be a requirement for additional staff, skills, or software? Finance will also be responsible for facilitating access to the pension systems.
Whatever software solution is in play, it must be able to make the necessary calculations, deductions, and contributions to the CPA, as a bare minimum.
However, advanced providers can also offer valuable advice and support with the process, particularly where they have prior experience with auto-enrolment.
Going one step further still, some providers may be able to take on management of the entire process, vastly reducing the administrative pressures on the organisation.
