Wed, 8 Feb 2012

PwC: Companies in danger of leaving auto-enrolment preparations too late

Companies are in danger of missing their auto-enrolment staging dates unless they begin preparations 18 months in advance, according to PricewaterhouseCoopers (PwC).

Experts at the professional services firm say payroll is central to the process of pension auto-enrolment but how the data it collects is distributed raises a number of time consuming issues when developing effective processes.

John Harding, PwC tax director, said: “What we are coming back to more and more is that payroll is absolutely central to this whole issue, there are a lot of payroll processes and systems in place and we are now finding they need to be put together and harmonised.

“The biggest danger is that organisations are leaving it too late to address this – so we are saying to organisations, based on our experience, you need 18 months from when you decide to do something about auto-enrolment to actually getting the whole thing in place.

“You will need to deal with your different stakeholders: your internal stakeholders, your external stakeholders, pension providers, etc. You will then need to pool that all together, map out all your processes and implement them – our best guess is that is going to take at least 18 months.”

Best practice

Harding says the firms he is working with that are making the best progress on auto-enrolment are bringing together relevant stakeholders within their organisation early on, allocating tasks and encouraging departments to flag up areas of potential concern.

“I think that is one of the things that has surprised me, just how many different stakeholders there are and when you try to design an end-to-end process just how many details need to be thought through,” he said.

“I can imagine some organisations struggling to get the third parties together in the time frame and to agree responsibilities for who does what, who hands over which pieces of data, who has responsibilities for which actions and where it is recorded.

“I don’t think any one function within an organisation can take auto-enrolment on alone.”

Auto-enrolment starts for the the largest employers in October this year and companies with less than 500 staff will enrol progressively from 2014.

See also:

• Payroll World and Sage undertaking definitive RTI and auto-enrolment survey
• Auto-enrolment timetable changed to provide “breathing space” for small businesses
• Payroll professionals warned not to give pensions advice