Auto enrolment - a new revenue stream for bureaus
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Auto Enrolment: A New Revenue Stream for Payroll Bureaus With the introduction of automatic enrolment, thousands of employers need to automatically enrol their eligible employees into a workplace pension scheme. For many employers they will look to their bookkeeper, accountant or payroll advisor for help and advice. Discover how you can benefit financially by offering Auto Enrolment a service. With a combined Payroll and Auto enrolment solution in place, you will benefit from greater efficiency, increased value and improved cost savings. Find out how and why Auto Enrolment should be a chargeable service. Agenda Auto Enrolment Overview Small Employers are Unprepared for Auto Enrolment A New Revenue Stream for Payroll Buraus Auto Enrolment Software Solutions BrightPay's Key Take-Aways For more information visit www.brightpay.co.uk.
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Auto enrolment - a new revenue stream for bureaus
- 1. The webinar will begin shortly... Auto Enrolment – A New Revenue Stream for Payroll Bureaus Creative Auto Enrolment: Auto Enrolment Made Simple By Paul Byrne By Steve Johnstone
- 2. By Paul Byrne Auto Enrolment – A New Revenue Stream for Payroll Bureaus
- 3. By Steve Johnstone Auto Enrolment Made Simple
- 4. Q&A Session Questions Tab or #BPWebinars Competition Two BrightPay 2015/16 bureau licences On Demand This session is being recorded REC Q&A WIN
- 5. Auto Enrolment – A New Revenue Stream for Payroll Bureaus
- 6. • Accountancy Practice for 20 Years • Payroll software development • Expanded into the UK – BrightPay & Bright Contracts • 80,000 employers across the UK & Ireland use our products Paul Byrne
- 7. • Auto Enrolment Overview • Small Employers are unprepared for Auto Enrolment • A New Revenue Stream for Bureaus • Auto Enrolment Software Solutions • BrightPay’s Key Take Aways Agenda
- 8. Auto Enrolment • Government initiative – Save for later life • Rolled out in stages: Oct 2012 – Oct 2018 • All employers required to offer a workplace pension scheme to eligible workers.
- 10. • Aged between 22 and State Pension age • Earn more that £10,000 per year • Work, or ordinarily work, in the UK Eligible Jobholders Non Eligible Jobholders Entitled Workers Auto Enrolment
- 11. Auto Enrolment Responsibilities 1. Set up a Pension Scheme 2. Staging date – Assess the workforce 3. Communications 4. Declaration of Compliance 5. Ongoing Duties
- 12. Auto Enrolment Look to accountant, bookkeeper, or payroll bureau for advice and counsel Look up clients staging dates on The Pensions Regulator’s website 78%
- 13. Small Employers are Unprepared for Auto Enrolment
- 14. 1,250,000 Employers Yet to Stage 60,000 Staged to date
- 15. 29%78% 39%50% 50% of those already enrolled turned to advisors very close to staging 3 out of 10 payroll administrators – clients will rely on them completely 39% – Clients would be able to deal with AE administration demands 8 in 10 – believe clients would wait last minute to seek advice
- 16. A New Revenue Stream for Bureaus
- 17. Challenges Recent challenges for payroll bureaus: • RTI • iXBRL • FRS 102 Auto Enrolment is the one new change that you can make a profit from.
- 18. Key Points 1. Employers will need help from payroll bureaus 2. Employers will come to you last minute for assistance 3. Employers will be happier to consolidate all their outsourced services to one person or advisor
- 19. Key Questions 1. Are you prepared to offer Auto Enrolment services to clients? 2. Are you willing to lose clients if you do not offer Auto Enrolment services? 3. Will you make a profit from Auto Enrolment?
- 20. A New Revenue Stream • Potential - Gain new clients • Increase fees with existing clients • Short window of opportunity to position themselves as open for business
- 21. A New Revenue Stream • Establish yourself as a proactive rather than a reactive AE advisor • Naturally increase profits • Necessary level of service – initial set up fee plus a monthly retainer
- 23. Software Solutions • Average 33 administrative tasks • Automate employer responsibilities • Combined payroll and auto enrolment solution • Greater efficiency, increased value, improved cost savings
- 24. Software Solutions Payroll software that automates auto enrolment tasks is vital: • Employee assessment • Personalised communications • Ongoing monitoring • Opt-outs & refunds • Mandatory reporting • Pension contribution deductions
- 25. Software Solutions • Does your payroll software provide Auto Enrolment functionality & support? • BrightPay – an easy to use Auto Enrolment solution • Everything you need to provide a profitable AE service to your clients
- 26. * Offer applies to new customers who switch to BrightPay from another payroll software provider for the first year subscription only. This offer applies to BrightPay 2015/16 bureau licence only and does not work in conjunction with any other offer.
- 27. How BrightPay Handles Auto Enrolment
- 28. Key Take Aways
- 29. By Steve Johnstone Auto Enrolment Made Simple
- 31. Monday 7th December @ 10.00 am https://www.brightpay.co.uk/events/1039/ CPD Accredited: Auto Enrolment Training for Payroll Bureaus By Paul Byrne & Victoria Clarke
- 32. 99.3% Customer satisfaction rate 99.5% Describe interface as user friendly 98.8% Would recommend BrightPay 98.5% Satisfied with Customer Support
- 34. Accredited by ICB - Read here “The BrightPay user interface is superb and makes data capture painless.” “The language used is easy to understand and minimises the use of payroll jargon.“
- 35. Questions & Answers For more information visit www.brightpay.co.uk or phone 0845 3004 304
Editor's Notes
- My background is as a practising accountant. I started my own practice back in the 80s and eventually grew it to a 3 partner practice with 10 staff. While in practice, I provided payroll bureau services for about 30 clients so I have some idea what it is like in the front line. In 1992, I got into payroll software development - A large part of my reasoning for this was make better software than what I was using at the time. Eventually, I began working in software development full time, allowing us to focus on a wider range of software packages and expand into the UK. Eventually, we introduced BrightPay and Bright Contracts in both the UK and Ireland. However, I can’t claim full credit for BrightPay, as it is written by someone younger and better than I (my fellow director Ross Webster). Today, 80,000 employers across the UK and Ireland use our products, a figure that we are improving on every year.
- So, here is the agenda for my slot today which I hope you will find useful and give you plenty of food for thought. When talking I will often refer to Auto Enrolment or Automatic Enrolment simply as AE. For those of you who have tuned in to any of our previous webinars, apologies if I end up repeating some of the points previously made. Unfortunately, this is unavoidable.
- OK, a quick recap on what AE means and just to note that this is only a summary. AE is a vast subject and some areas are highly complex. It would take days (even weeks) to cover the subject properly. At the end of the day, you do not need to have an in depth knowledge of AE. It is up to your pension provider and payroll software provider to filter out all the noise for you. So, in short, AE is a Government initiative to help more people save for later life through a pension scheme at work. AE is being rolled out in stages across all employers, and started with the larger employers in October 2012. By October 2018 all employers will be required to offer workplace pension schemes to eligible workers.
- You will see from the slide that January 2016 is essentially when small and micro employers start to stage, with 110,000 employers set to stage in the January to March 2016 quarter alone and over a million more employers from there on. This is the start of the so called tsunami and things may get hectic from there on. A lot of the companies staging before now will probably have had their own HR people, in house accountant or payroll department to help them through the enrolment process. The vast majority of those staging from January 2016 will have no in house expertise and will more than likely turn to you for help. So, you have a gift wrapped business opportunity!
- What AE actually means for an employer is that, from their staging date (or from their deferred date if they are using postponement), all eligible jobholders must be automatically enrolled. Eligible jobholders are those who are between the age of 22 and state pension age earn more than £10,000 per year work or ordinarily work in the UK Eligible jobholders can opt out after being enrolled. All other employees are either non eligible jobholders or entitled workers and they can choose to join the workplace pension scheme. In summary, AE is something that is optional for the employee but mandatory for the employer. And just an aside on postponement …
- With AE comes a number of employer responsibilities: Employers must set up a Pension Scheme with a qualifying pension provider. Next, employers must assess their workforce at their Staging date and enrol all eligible jobholders unless they are using postponement in which case it is the deferred date that the duties kick in. Employers must also pass on the necessary communications to all employees, not just those who are automatically enrolled. Within 5 months of their staging date, employers must complete a Declaration of Compliance to notify the Pensions Regulator that they have complied with AE. There are also a number of on-going employer responsibilities such as handling opt outs (and opt ins), making deductions and contributions, monitoring employees each pay period, and sending a contribution file to the pension provider.
- The Pensions Regulator has conducted some interesting research. 78% of small businesses will look to their bookkeeper, accountant, or payroll bureau provider for advice. Another thing that some bureaus don’t know is that, it is possible to look up clients staging dates on The Pensions Regulator’s website.
- Almost 60,000 employers have staged so far, most of whom are large firms with existing workplace pension, a Payroll or HR department and in house financial advisors. For most of the 1.25 million employers still to stage and for the 250,000 new employers each year, this will be their first experience to review any kind of pension scheme for their employees.
- Some more interesting research by The Pensions Regulator … Advisors say 50% of employers who have already enrolled have turned to them very close to their staging date, 3 out of 10 payroll administrators feel their clients will rely on them completely to help them through the process. Only 39% of payroll administrators feel their clients would be able to deal with any additional administrative demands involved in implementing AE. Finally, 8 in 10 believe that their clients would wait until the last minute to seek advice.
- So, how will AE result in a new revenue stream for you? A discussion I had with a BrightPay customer recently sums it up nicely. He was charging his 15 employee client £400 for handling their staging and had upped his payroll fees from £1 per payslip to £1.50 per payslip to cover the on-going AE duties. Staging took him less than an hour. There were no additional software costs and the on-going duties were minimal in terms of his time. And most importantly, the client was delighted!
- Payroll bureaus have had a lot to deal with in recent years. Things have cost them in time, money, training and new systems and which they could not readily recharge to their clients. Examples are: RTI iXBRL FRS 102 AE is the one new change that you can charge for and that should not cost you anything.
- Three key points are evident: Employers will need help from payroll bureaus Employers will probably come to you last minute for assistance Employers will prefer to consolidate all their outsourced services to one provider
- So the Key Questions: to ask yourself are: Are you prepared to offer AE services to clients? Are you willing to lose clients if you do not offer AE services? This is a real possibility. If you decide that you don’t want to get involved, your clients may seek another advisor who will obviously try to convince your client to use them for everything else. Will you make a profit from AE? The answer to this last question, I believe, is yes.
- With the high levels of employers set to enrol in the coming year, there is huge potential for bureaus to gain new clients, and to increase fees with existing clients. Payroll bureaus have a relatively short window of opportunity to position themselves as open for business in this ever increasing cluttered space.
- My advice is to be proactive and find out on the TPR website what each of your clients’ staging dates are and contact them well in advance of their staging dates. Payroll Bureaus will naturally increase their income by providing this service in exchange for an initial set up fee plus a monthly retainer to manage the on-going AE duties or an increased price per payslip. One recurring theme I hear from accountants and bookkeepers alike is that they can’t really charge for AE, their clients wouldn’t accept it or can’t afford it. My answer to this is that it’s not your fault that AE has come in. It’s not your fault that there are many new responsibilities attached to AE. It’s not your fault that there are penalties for non compliance. One idea is to offer a free AE consultation with clients. This consultation allows you to explain the various administrative aspects of AE. The consultation approach will hopefully eliminate your clients seeking AE advice from you for free. Typically a consultation will last for a half an hour. It is also useful to produce a PDF for your client explaining each of the AE duties. This information and a number of guides are available on The Pensions Regulator's website.
- Payroll software is the logical fit for processing AE. The payroll will already hold details of age and earnings and these are the two main elements in determining what AE actions are required at any stage. Payroll software can therefore readily handle AE, much like it took up the challenge of RTI. In fact, AE slots neatly alongside RTI as just one more tick box to check each pay period.
- There are over 30 administrative tasks to perform in relation to AE. Software solutions can automate employer responsibilities, which reduces the time spent on these tasks With a combined payroll and AE solution in place, accountants, bookkeepers and payroll bureaus will benefit from greater efficiency, increased value added and improved cost savings.
- Payroll software that can automate the employer admin tasks such as employee assessment, personalised communications, on-going monitoring, handling opt-outs, refunds, mandatory reporting and pension contribution deductions will be vital.
- If AE is not already included with your current payroll software as standard, you may have to pay additional costs for AE functionality and support. Start of shameless plug … BrightPay is an easy to use payroll and AE solution that can do everything you need to provide a profitable AE service to your clients.
- With BrightPay you can benefit from unlimited employers, unlimited employees, free phone and email support, all for just £199 plus vat per annum. You can also benefit from a 60 day free trial which has no limitations to the software.
- I would now like to hand you over to Rachel for a quick demo showing you just how easy auto enrolment can be with BrightPay. In this example we are assuming that the employer (or you on their behalf) has already registered with a pension provider, in this case Trust Pensions. Thank You Rachel.
- Thank you Vicky So to summarise.. Be Ready: Know what you need to know when asked by your clients. With this very thing in mind, I recently published a paper on AccountingWeb with the disrespectful title “Automatic Enrolment for Dummies”. It’s a 10 minute read. We will send you a copy of this powerpoint after the webinar and this will include a link to this article. Payroll Software: Make sure you have the correct software and systems in place to prepare your clients easily for AE. Be aware that some payroll software packages only partially handle AE Costs: Be aware of hidden costs when researching AE solutions. You need to think about any limitations when it comes to the number of employers and employees Customer Support: Confirm that support costs are included or inexpensive with your chosen solution. Open for Business: Be proactive and inform your clients that you are open for AE business NEW Be Ready: Know what you need to know when asked by your clients. With this very thing in mind, I recently published a paper on AccountingWeb with the disrespectful title “Automatic Enrolment for Dummies”. It’s a 10 minute read. We will send you this powerpoint after the webinar and this will include a link to this article. Payroll Software: Make sure you have the correct software and systems in place to prepare your clients easily for auto enrolment. Be aware that some payroll software packages only partially handle AE Costs: Be aware of hidden costs when researching AE solutions. You need to think about any limitations when it comes to the number of employers and employees Customer Support: Confirm that support costs are included or inexpensive with your chosen solution. Open for Business: Be proactive and inform your clients that you are open for Auto Enrolment business
- Before I pass you over to Steve, if you did have any questions in relation to BrightPay and AE please type them into the chat bar now so we can get through as many questions as we can in the Q & A session. I'm delighted to pass you over to Steve, who will present “Auto Enrolment made simple”.
- Here are a few interesting statistics from a recent customer survey.