Why does payroll need to take responsibility for automatic enrolment?

By Matthew Thompson | 18th February 2014 | 2 min read

It has now been almost 18 months since the roll out of automatic enrolment began, with many larger employers now complying with the change.

2014 will be a very busy year for automatic enrolment, as The Pensions Regulator announced that around 32,000 businesses have staging dates in the 2014-2015 financial year alone. Preparing early is key to ensuring that your organisation has a successful transition, with as little stress as possible.

Achieving compliance with automatic enrolment is vital, as businesses could face fines of up to £10,000 a day if they don’t.

Payroll will play an important role in ensuring the success of automatic enrolment within businesses. A recent IRIS survey found that 58% of businesses believe that either payroll alone, or a combination of payroll and other departments would be responsible for automatic enrolment.

39% of respondents answered that payroll alone would hold primary responsibility, with 13% answering “payroll and HR”, 3% answering “payroll and finance” and 3% answering “payroll, HR and finance”.

In order to be effective automatic enrolment must take place in payroll. Payroll has access to employees’ PAYE information, and runs the calculations which must be completed before employee assessment can occur. It is only logical that the assessment process should also take place within payroll, to make the process as efficient as possible.

Automating the calculation process which must take place at each pay period is also critical. This is due to the high level of complexity involved and the legal requirement to maintain records to up to six years. Finally, providing deduction information to your pension provider at each pay period it vital and must be generated by payroll.

Feedback from larger employers who have already staged is that the most important step to take is to start thinking about what you need to do as early as possible. Getting payroll involved from the start and establishing a comprehensive plan will make the journey to automatic enrolment much smoother.

Contact us today to find out more about the full range of IRIS automatic enrolment solutions.

IRIS automatic enrolment solutions