Payroll needs to take responsibility for automatic enrolment, IRIS survey finds
Payroll will play a vital part in ensuring the successful implementation of automatic enrolment, an IRIS survey has found. The survey, which was carried out amongst nearly 100 enterprises who are staging imminently, asked “who is primarily responsible for automatic enrolment within your organisation?”
58% of the survey sample felt that either payroll alone, or a combination of payroll and other departments would be responsible while 39% of respondents answered that payroll would hold primary responsibility for automatic enrolment. A significant minority, however, felt that automatic enrolment would involve collaboration and joint responsibility between departments. 13% answered “payroll and HR”, 3% “payroll and finance” and a further 3% “payroll, HR and finance”.
23% believed that finance alone would be responsible for automatic enrolment and 10% answered HR.
Commenting on the results, Mark Paraskeva, CEO of IRIS SME Division said: “The key point to take from this research is that nearly six out of ten respondents to our survey believe that payroll will be responsible in some way for the success of automatic enrolment within businesses.
“We have witnessed a major shift in thinking and approach as customers have actually started to implement automatic enrolment.
“Initially, it was thought to be achievable as an independent process which could be completed in a standalone fashion,” he continued. “But as payroll professionals have examined the legislation and attempted to bring it into practice, several key challenges have emerged.”
First, to be effective, automatic enrolment has to be processed in payroll. Payroll has access to employees’ PAYE information for every pay period, and the payroll calculations must be completed before assessment can take place. This means that it really is the only practical approach to directly access the relevant information needed to assess employees’ eligibility for automatic enrolment. If the responsibility is assigned to a different function or process, it will still need to work with payroll in order to access this information, and the inherent delays and opportunity for error may mean the difference between compliance or not.
Second, automation of the calculations at each pay period is critical due to the complexity and the need to comply with legislation by keeping records for 6 years.
Third, providing pension deduction information to the chosen pension provider at each payroll run is non-trivial and needs to be generated by payroll.”
If businesses want to get a free auto enrolment health check, they can contact IRIS on 0344 815 5656 or email firstname.lastname@example.org