Close to the wire

Scottish Widows is promoting its AssistMe auto-enrolment tool ahead of its actual launch says Ian McKenna, director F&TRC

We are getting an increasing number of reports suggesting that employers now need a lead time of approximately 12 months to establish a scheme to comply with auto enrolment. This compares with a three month period which would have been more typical in the past. So much for the Coalition’s promises to be “business friendly”.

So it is not surprising that an increasing number of organisations are offering software to support employers. The latest to promote its wares is Scottish Widows, which has have been advertising its AssistMe service extensively. I use the phrase “promoting” deliberately as it is important to understand that the actual software has not yet been released. What follows is a summary of the contents of Scottish Widows’ current demo system; the actual software may arrive in December.

The objective of AssistMe is to provide the employer with a mechanism through which they can identify those employees that need to be auto enrolled, generate the necessary communication by email or on paper, manage, at least in part, the actual opt out process and use the information created to ensure that the correct contributions are deducted from payroll. In addition it will support the contribution collection process both for Scottish Widows and The People’s Pension, where the employer has opted to take advantage of the partnership between the two.

The system is designed to identify all individuals who will need to be enrolled, it also records all opt out dates and who the employer will be required to re-assess and re-enrol, on the third anniversary of the original staging date.

When a member receives the communication generated from AssistMe, via their employer, they are provided with a web address where they can log in to opt out as well as a unique identifier to use with this. This login is active for the 30 day opt out period. Alternatively users can opt out using paper, in which case they have to call Scottish Widows to request the opt out documentation which they then complete and return to the insurer. If a member has opted out using the online mechanism a message is automatically passed to Assist-Me, which in turn generates a message to the employer. Where paper is used this has to be handled separately.

All data regarding opt out and future re-enrolment is available as a download at any time. Scottish Widows’ position is that this information is the employer’s data and should always be available to them. This is welcome as I have seen other organisations take a less transparent approach.

Where an employer is using multiple pension providers, whilst AssistMe can support the overall eligibility process it cannot be used to facilitate communications or contributions. The exception to this is The People’s Pension, where the communication and opt out process, as well as contribution collection can be supported. Unfortunately no similar facility is available with Nest. Scottish Widows was keen to point out that it would like to put such a function in place but apparently Nest are not currently encouraging such arrangements.

I think the above restrictions will inhibit the benefits of AssistMe. I have seen other offerings which are able to support several pension arrangements from different providers in a single system. Scottish Widows told me their view is that they would only see The People’s Pension and Nest as being complementary to their product. Whilst I can understand this view for employers putting in schemes for the first time, any adviser who plans on conducting a significant amount of auto enrolment business might want to seek out a system capable of accommodating on-going contributions to existing third-party schemes.

Once the eligibility, communication and opt out processes have been addressed the system then facilitates the establishment of each months pension contributions, including where applicable, those to Peoples Pension.

Scottish Widows plans to offer AssistMe with all new group pension arrangements subject to their normal minimum of five members in a scheme. It is also expected that existing schemes will be migrated to AssistMe as the staging dates fall due.

Although by no means as sophisticated as other systems I have seen, it is free and I can understand why Scottish Widows would want to promote its intention to deliver software to support auto enrolment now, even though it is not actually available yet. The limited window which exists to establish commission earning schemes before the year-end is doubtless a significant driver.

My concern is that as the system has not actually been delivered, all that Scottish Widows are really showing is what they are hoping to deliver. Technology projects are notorious for being delivered either late or with less functionality than originally intended. Any adviser recommending a scheme on the basis of AssistMe will probably want to be at pains to set realistic expectations to employers about when the system might arrive.