Month: November 2016

The UK is one of many countries, including China, Japan and the USA, to be facing an ageing population. Whilst this is great news for the UK’s current retirees who are able to benefit from a healthy government pension it does pose one key concern. With an ageing – and also increasing – population, a strain is inevitably being put on the government’s pension funds. Taking this into consideration, there have already been talks to raise the automatic enrolment (AE) contribution to 12.5% by 2028.

Some argue that such an increase in contributions is not necessary. For example, an increase in employer contribution results in an increase in employee contribution which may be an unwanted hit to their monthly pay. This feeling is common amongst young people who do not see the value in thinking about their retirement fund so early on. However, if young people want to continue buying goods and using services at the rate they are used to, now is the time to be upping contributions.

Additionally, there needs to be measures in place to sustain the future of the population. According to the Office for National Statistics (ONS), those aged 90 and over in the UK has tripled since the 1980’s, whilst the population is predicted to increase to over 70 million by 2027. This comes down to key factors such as healthier lifestyles and modern medicine resulting in people living longer. Therefore, increasing the minimum AE contributions will ensure pension funds do not run dry in years to come.

So employers and employees alike, prepare yourselves! Whilst AE laws state by 2018, employers and employees must submit a minimum contribution of 1% each, this is only just the beginning. In order to sustain our growing and aging population, contributions are going to have to rise in order to prevent a pension pandemonium.

The ‘gig-economy’ is a term cropping up more and more, and refers to the environment where workers can operate under a contractor basis for an organisation. For example; Deliveroo, Uber, Etsy and Airbnb. With gig economies, the appeal is there. A short term solution for many to earn an income in an uncertain job market is proving to be a sure way to earn some money with flexible working hours. However, a potentially short term solution still has long-term rights which affect their future.

Uber’s recent tribunal in particular has shaken the world of Auto Enrolment (AE). Once upon a time, employers in a ‘gig-economy’ could hide behind the shield of adopting self-employment practices. However, it was announced on the 28th October 2016 that Uber employees are classified as ‘workers’ and not ‘self-employed’ which Uber are now trying to appeal. Failing the appeal, this will open up a new can of worms surrounding AE and 60,000 ‘gig-economy’ workers in the UK will have more recognised employee rights, such as being enrolled in a pension scheme.

Similarly, Deliveroo have been encouraged to unionise in an effort for the company to recognise them as workers and as such have certain rights. This encouragement comes after the new payment structure was announced as £3.75 per delivery compared to the old structure of £7 per hour and £1 per delivery. This new structure leaves some employees unable to earn any money during their shift if no deliveries have been booked. Therefore, it is so important for a union to be in place in order to treat the Deliveroo riders’ as workers with access to basic rights such as a pension scheme, as opposed to being viewed as just another cog in the machine.

The next few weeks will witness the government examine the terms of AE to ensure nobody misses out and that those classified as workers will be entitled to the rights set out in The Employment Rights Act 1996. Watch this space for future developments!

An increasing hot topic in the realm of AE includes the rising level of penalties being issued by The Pension Regulator (TPR) which many companies are still struggling to adhere to. Simply put, employees who meet a certain criteria must be enrolled in a pension scheme by their staging date. No head in the sand, no turning a blind eye – NO EXCUSES. This post will reinstate why it is so important to ensure your employees and clients are enrolled in a pension scheme as soon as possible.

This year alone, Q3 witnessed 3728 Fixed Penalty Notices due to the failure to comply with AE guidelines. A failure to act can result in an initial £400 fine as well as an accrued daily rate ranging from £50-£10,000. Swindon Football Club know just too well how quickly fines set by TPR can add up due to failure to act on penalty notices. By the 16^th of February 2016, the football club had finally settled a hefty £22,900 fine by TPR for repeatedly failing to comply with the guidelines. This included the initial £400 fine for failing to act by their initial staging date of 17^th October 2014, as well as the first lot of fines set at £2500 per day from 18^th February 2016 – 26^th February 2015.

While TPR repeatedly stress they are there to help employers, they will not tolerate any excuses. Part of the problem rests with the fact that many employers, and those of SME’s in particular, are still not aware of how simple the process can be through outsourcing their needs to the right people. Don’t get caught out by avoidable fines! If an employer is strapped for time, or confused by the AE process, pension experts such as pensionsync and OptEnrol are on hand to help guide employers along the process.

The recent partnership between OptEnrol and pensionsync has created a number of benefits for OptEnrol clients to make the AE process simpler by the day. As an employer, you may often wonder, ‘What happens when making the first steps into the AE process? Where do we begin?’ With a range of pensionsync’s useful guides and resource saving calculator, clients can now piece together what AE means to them, and how the partnership can assist in outsourcing AE needs.

The thought of AE can be daunting and is often considered a costly and time-consuming task. However, the use of a free resource saving calculator puts into perspective how simple the automation process can be with the right planning and strategy. The administration process of AE is proving to be an overwhelming mission for many payroll departments. As pensionsync’s Chris Deeson has discovered, the average additional time payroll staff are spending on administration processes relating to AE can be up to 67 minutes per payroll!

Through outsourcing the AE process, the resource calculator demonstrates how the administration time can drop to a more appealing 5 minutes per payroll. This already gives a clearer picture as to how the OptEnrol and pensionsync integration will benefit your department.

Money and time – they go hand in hand. The resource calculator gives your department quantifiable evidence which demonstrates the cost savings which can be made by taking on the OptEnrol and pensionsync partnership. Depending on the number of clients or employees you have, this can result in hiring additional members of full time staff to manage the increasing workload the automation process requires. The OptEnrol and pensionsync partnership saves you the hassle of spending extra costs when your company can make use of resources and expenditures elsewhere.

With the hassle of auto enrolment taken care of by pensionsync and OptEnrol, the advantages are endless. Your company can cut costs, save time and clients can have peace of mind that the process is taken care of by experts who are dedicated to following The Pension Regulator guidelines.