Research by The Pensions Regulator shows the vast majority of payroll administrators and accountants now expect to have some involvement with automatic enrolment into workplace pension schemes, but many are still unclear about key details of how the new system will work report Harris & Co chartered accountants Northampton, the specialist small business accountants.
Its regular tracker survey found 96% of payroll administrators and 95% of accountants anticipate helping clients with their duties as auto enrolment is introduced from 2012 to 2018. However, while awareness of the reforms remains high amongst all intermediary groups, including accountants and bookkeepers, the survey shows that many still have only a basic grasp of key issues.
These include the types of earnings to be assessed; what a pay reference period is; the duty to enrol workers who opt in during the postponement period (if used); and the types of workers who are eligible for automatic enrolment (namely employees and contractors).
Levels of understanding were lower among accountants (60%) and bookkeepers (48%) compared to payroll administrators (77%) or trustees (67%), largely because they are more likely to be dealing with employers furthest away from their staging dates. Despite this lack of detailed knowledge, many had already had some form of interaction with their clients about automatic enrolment (62% of accountants and 38% of bookkeepers).
The survey results show accountants and bookkeepers were well aware of requirements such as the need to identify eligible workers, record keeping, but were much less clear about the need for employers to submit their automatic enrolment details with the appropriate government body.
The Pensions Regulator’s executive director of automatic enrolment Charles Counsell said:
‘There are still gaps in knowledge. We will be highlighting our role over the coming months to advisers ensuring they are aware of the information and help that is available to them. We also need to ensure advisers and employers know that the regulator is not just a source of information but also the body that all employers need to submit their automatic enrolment details to in order to be compliant.’
The survey also showed that 73% of accountants and 65% of bookkeepers intended to charge their clients for any automatic enrolment activities they undertake, in contrast to earlier research which found that 48% of small and 51% of micro employers said they were not prepared to pay external advisers to help them through the automatic enrolment process.
Separate analysis of auto enrolment by Deloitte has warned that the introduction of price caps on commercial pension schemes, designed to reduce the impact of management charges, may result in many employers having to opt for the government sponsored National Employment Savings Trust (NEST).
Andrew Power, insurance partner at Deloitte, said:
‘Price caps can ensure high cost schemes cannot survive and consumers do not have their pension savings whittled away by excessive charges. However, price caps, which will largely impact small schemes, will reduce competition for many of the newer schemes that will come into effect under auto-enrolment. This may hinder competitive forces which would drive down costs and possibly leave NEST as the only option for smaller schemes.’