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Payroll – the Cinderella department

By Ian Holloway, head of legislation and compliance at Cintra HR & Payroll Services

The Pensions Act 2008 requires a review of the National Employment Savings Trust (NEST) on three things:

• The maximum level of contributions that can be paid
• Transfers in and out of the scheme, and
• “Other matters”

Points 1 and 2 have been covered by legislation coming in on 1 April 2017 (the UK-wide National Employment Savings Trust (Amendment) Order 2015). Point 3 has been taken as an opportunity for the Department of Work and Pensions to look at auto-enrolment as a whole.

On 12 December 2016, parliamentary under-secretary of state for pensions, Richard Harrington, defined and outlined the scope of the 2017 review. Essentially, this is all about building on the “success” of auto-enrolment but with the recognition that maybe the right people are not saving enough for the retirement. The review will cover:

• Workers with multiple jobs
• The self-employed and how they can be “helped” to save for their retirement
• The “technical operation” which will consider whether some employers are disproportionally affected and simplifications in general
• The charge cap
• Operational issues such as the earnings trigger, the qualifying earnings thresholds and the age criteria
• The alternative quality requirements

All of these things are very, very payroll-related or, at least, impact the payroll profession greatly. After all, legislation may say it but it is payroll, HR and software professionals that actually make it happen. Therefore, I was really interested to see the make-up of the “expert advisory group” that would head the review. This was announced on 8 February 2017 and will be chaired jointly by:

• Ruston Smith, trustee director at The People’s Pension
• Jamie Jenkins, head of pensions strategy at Standard Life
• Chris Curry, director of the Pensions Policy Institute

Maybe there was mention of payroll, HR or software in the members of the advisory panel:

• Carl Emmerson, deputy director, Institute of Fiscal Studies
• Jane Vass, head of public policy, Age UK
• Neil Carberry, director for people and skills, Confederation of British Industry
• Linda Ellett, KPMG, partner – tax and pensions practice
• Nigel Stanley, NEST members’ panel, chair
• Jocelyn Blackwell, trustee director NOW: Pensions
• Judith Hogarth, pensions policy for the EEF

So, what should have been an opportunity for an all-inclusive review is headed largely by pension professionals from large organisations. Will these people be considering payroll, HR or software and, further, will they be extending their research to all workers from the top to the bottom of the earnings ladder?

Maybe there would be a mention in the “terms of reference” – no. However, when it comes to seeking views in their “initial questions’ document” payroll does get a mention, if only to say that they welcome viewsw from administrators and bureaux. I suppose it does mention the words benefit consultants and employers as people that they are interested in hearing from by 22 March 2017.

Once again, payroll is the Cinderella profession – i.e. you can’t come to the ball in your own right. And this comes from the DWP themselves!

Posted on 27th February 2017 by Jerome Smail

 

 

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