Auto-enrolment creates a challenging pensions landscape for employers.
If I had a pound for every employer that has told me that, with hindsight, they would have allowed much more time to plan and execute their auto-enrolment strategy, I would be rich.
Employee communications seem to be dominating many employers’ auto-enrolment agendas because of the time these are taking to finalise. Not even the experts have cracked it: the pensions manager at one pensions provider has had to wait a staggering six months for its employee communications strategy to be signed off, despite the fact that it was created by the provider’s in-house auto-enrolment team.
This proves that there is no one-size-fits-all silver bullet for auto-enrolment success, as providers themselves are the first to admit. So how do employers have any chance of identifying the provider services that best suit their business?
In-house preparation is a good start and can help employers build strong foundations for their auto-enrolment strategy. This should identify the needs of their workforce and their business, and the timescale to which they need to work.
Focus groups comprising an employer’s existing providers can help map out exactly how each can help the organisation create and implement its auto enrolment strategy, identify any gaps in service provision and then assess which provider is best placed to fill these.
Most employers seem to be using their existing providers, be they pensions, payroll, consultants or a combination of all three, to help deliver their strategy. Few organisations seem to be appointing new providers for the sole purpose of implementing auto-enrolment, or new systems, which is understandable given the scale of projects such as pension scheme and payroll overhauls.
Some employers are using auto-enrolment as a catalyst for reviewing their wider employee benefits package, so while they may be entrusting their auto-enrolment needs to their existing providers, they are demanding greater value for money and value-added services to offer to employees as part of their existing contracts.
All this makes for an exciting pensions market in which providers are working harder than ever to help existing clients deliver their auto-enrolment projects at the same time as they try to entice new clients to take up their revamped and/or new service propositions.
For employers with a good understanding of their service needs, based on the requirements of their business and, importantly, their employees, and with a realistic timescale within which to work, there lies an interesting and, dare I say, uncomplicated road ahead.
Clare Bettelley, associate editor, Employee Benefits