A path through the regulatory jungle

Standard’s new auto-enrolment tool takes much of the strain out of explaining the new rules to employers says Ian McKenna, director of F&TRC

Despite The Pensions Regulator insisting that auto-enrolment will be a straightforward process for employers, a more accurate assessment is actually that it would be hard to envisage a process that could be more confusing for small and medium sized businesses.

The Pensions Regulator has clearly been reading the FSA handbook on how to use fines to justify vastly inflated salaries and doubtless laying so many traps for unsuspecting businesses will be a great revenue generator. Any employer not willing to run the risk of incurring substantial fines will be well advised to engage professional support and Standard Life’s Pension Reform Pathfinder tool should be an excellent aid in demonstrating why.

One of the major challenges of auto-enrolment is articulating to the employer the full extent of the complexity of the regulations firms will be required to comply with as the new rules come to affect them. This is where the Pension Reform Pathfinder tool, accessed from the Pension Reform area of Standard’s workbenefitszone.com website, delivers.

Having clicked on the link to the Pension Reform Pathfinder the service opens by explaining what a staging date is, asking the user if they know the date that will apply to their business. Where the user does not know a simple series of questions are asked to identify the staging date, this does necessitate the user knowing the last two digits of their PAYE code so it is worth making sure this is to hand.

Having identified the correct staging date the employer is then asked to identify if payroll is run monthly or weekly. Where employers use more than one frequency they will need to run the tool independently for each instance. Next the system captures the payroll cut-off date and salary payday and as this information is entered a list of key dates start to build on the right-hand side screen whilst at the top a timeline is also constructed.

It is good to see a pension provider recognising the need to support a range of browsers and mobile devices when deploying new technology

At this point the system also points out to users the actions that employers will need to take by the relevant dates. This is initially provided in brief one-line summaries, but a question mark icon can be clicked to provide additional information.

The service then identifies when the opt-out periods for the employer will start and end and again, add these to the list of key dates and time line as well as providing an explanation of what this means.

Next it provides a list of the payroll cut-off date actions and the key tasks that this will involve. It is also identified that if payroll frequency is weekly this can multiply the number of cut-off dates which will apply.

Having identified the dates that will initially apply to auto-enrolment the system also highlights the triennial review date before going on to explain how the employer can defer their duties by up to three months after the staging date.

At this point the benefits of such action are highlighted both in bullet points and in more detail under the question mark icons.

At this stage the user is asked to set their waiting period and is provided with an explanation of the benefits and impact of applying a waiting period to staging. A slider allows the user to adjust the waiting period at daily intervals up to three months.

In addition to the core functionality shown above users have the opportunity to carry out a new employee check to identify the dates that need to apply to any new members of staff after the initial staging. All these dates are generated in a simple format simply by entering the joining date for the new employee.

The Pension Reform Pathfinder has been built to work with a range of browsers including Internet Explorer, Firefox and Chrome, and significantly for an increasing number of advisers, I was able to get the service to work perfectly well using an iPad. It is good to see a pension provider recognising the need to support a range of browsers and mobile devices when deploying new technology.

Although I can see how it could be further developed to support direct use by employers, this tool is ideally positioned for an adviser to use to walk an employer through the extent of the complexity of auto-enrolment.