Why 65% of agencies say that managing the workplace pension is a 'total nightmare'

and what all agencies definitely need to know about workplace pension compliance

Most agencies are well in the throws of managing the workplace pension but how many actually know what their duties and obligations are - from a compliance perspective?

As if managing an agency payroll wasn’t admin-intensive enough…

Running payroll for staffing agencies and people on zero-hours contracts is pretty burdensome, particularly for agencies who pay their temp workers weekly, as employees details are always changing – and now there’s the Workplace Pension to grapple with to top it all off.  Plus, the knowledge that getting it wrong or being ‘non-compliant’ could lead to unwanted attention from The Pensions Regulator and potentially hefty fines. When it comes to pensions, it’s important to get it right. We wanted to find out how everyone was getting on, so we did an online survey. We found out that a whopping 65% of agencies who participated said that managing the workplace pension was a total nightmare. 15% said it was all outsourced and they didn’t get involved (ignorance is bliss – or is it?), 5% said that it was a bit of a headache and the other 15% said they were coping fine.

So, that’s 70% of the agencies we interacted with who are having either a major or minor headache when it comes to the workplace pension.

And regardless of whether people are coping well, outsourcing it all or tearing their hair out, there’s one thing that we suspect ought to be higher up the awareness scale for everyone – pension compliance, particularly in the area of the communications to and from employees.

Pension comms for agency workers

Many people think that compliance is just about setting up a pension in time and assessing/enrolling eligible workers – a sort of one-off compliance hoop to jump through. In reality, it’s much more than that. A huge part of compliance is around the communications sent to and received from temp workers. As people will meet the thresholds at different times and situations will change, these communications will be going out continuously. It’s an ongoing process and it might require more attention than it’s probably currently getting.

On top of this, the communications need to be stored by employers for 6 years. It’s not just the information sent out to employees that needs to be stored – the notices received from temp workers about what they want to do regarding their pension needs to be kept, too. Even agencies who have outsourced the set up and management of the workplace pension to a third party, it’s still their responsibility, as the employers, to ensure all of the communications are stored correctly for the right length of time.  Hence the nightmare!

So, what communications actually need to be sent and stored?

  • Notifications that an agency has a pension (for a new employee) or that a pension is being set up, and telling them that they’ll be assessed for eligibility along with the date that this assessment is going to happen
  • Notifications that workers have been postponed, whenever an option to postpone has been used
  • Alerts informing workers that they have been enrolled and the amount of time they have to opt out
  • Alerts informing workers that they have not been automatically enrolled, but that they can join or opt in to the scheme if they want to
  • Notifications to workers who have opted out, when the agency reaches their re-enrolment date (every three years from their original staging date) that they will be re-enrolled and the amount of time they have to opt out

To make things a bit easier, information can be delivered via email instead of by hand or post. But, employers need to be aware that if an email bounces, that’s not compliant. The individual’s email address needs to be updated and the email sent again, or the communication can be printed and given by hand or sent in the post.

What notices does an agency need to keep from its workers?

  • Notifications when workers choose to opt out of the pension
  • Notifications when workers choose to opt in or join the scheme
  • Notifications when workers choose to cease active membership (pause their contributions for a while)
  • Notifications when workers choose to resume active membership (start making contributions again after pausing them)

A bit about postponement

Because agencies and some companies employ casual workers who may only work for a few weeks or months at a time, having to assess and maybe enrol people as soon as they start work is unnecessary and not really in the spirit of why the workplace pension was introduced. So, The Pensions Regulator have set certain rules around postponement,  allowing agencies to postpone new workers for up to three months. The postponement rules also allow for workers to be postponed for a further three months from the date they become eligible. Remember, comms need to be send out to these workers whenever postponement is used!

Paycircle and pension comms compliance

This is a Paycircle article after all and no self-serving article would be complete without a shameless plug – so here it is…

Paycircle = simple and total workplace pension automation, including communications compliance. Hassle free, no extra cost, no headaches and certainly no nightmares.

Paycircle automatically manages the initial and ongoing assessment, postponement and enrolment of all agency workers so you don’t need to worry. All communications are sent automatically and are stored in your Communications Centre for the correct amount of time and these can be accessed anytime. Paycircle automatically emails the right notifications to the right people, at the right time.  As an extra bonus, Paycircle will automatically check for any bounced emails to ensure that all the notifications that get sent are received. If a mail bounces, simply update the email address and resend, or print it out and post it.

Paycircle also actions and stores all notifications from employees. Employees have access to their own portal where Paycircle provides education and support around all things pay, tax and workplace pensions. People have the option to opt in, opt out and start and stop contributions, all via their portal. Paycircle can action their requests directly with the pension provider, store the relevant notifications in your Communications Centre and alert you to everything that’s going on behind the scenes.

We love making things easy for people. We love compliance!

If you are interested in finding out how Paycircle can help your agency with payroll and pensions management, take a look at our website or send an email directly to catherine@paycircle.co.uk for more info.

 

Roisin Gray

Posted on Wednesday 31 May, 2017, 2 years ago

January 16, 2018

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