Assisting clients with scheme selection for pensions auto-enrolment

Workie in office
By Christine Scott and Jeremy Clarke

12 October 2016

The latest from ICAS on assisting clients with scheme selection for pensions auto-enrolment.

How business advisers can support their clients

Business advisers can help their clients by:

  • Providing factual information including offering a comparison of the schemes’ investment funds, charges and services.
  • Recommending a specific pension scheme to employers for automatic enrolment.
  • Referring clients to another adviser or to a pension scheme selection tool.

It is important to note that business advisers need to be authorised to give certain advice. While they can provide investment advice to an employer choosing a pension scheme for automatic enrolment, they should only provide investment advice to an individual if they have the appropriate authorisation from the Financial Conduct Authority.

It may not always be clear whether a client is seeking advice as an employer or an individual, for example if the client is thinking about joining the scheme themselves. Advisers may want to specify in their letter of engagement that any advice provided is in the client’s capacity as an employer and not as an individual.

ICAS members giving business to business advice should refer to our auto-enrolment help sheet and the ICAS Code of Ethics, and make sure that any automatic enrolment work carried out is covered by professional indemnity insurance.

Automatic enrolment: Does your client have an existing pension scheme they are thinking of using for automatic enrolment?

Your client may already have a pension scheme that they are thinking of using for AE. However, schemes need to be 'qualifying' to be used for AE otherwise they run the risk of non-compliance.

The Pensions Regulator (TPR) has information to help you support your client to decide which pension scheme to use to automatically enrol their staff.  

Automatic enrolment: Have your clients decided which pension scheme to use?

As part of their automatic enrolment duties, employers with staff who must be put into a pension scheme will need to have a pension scheme in place that is set up for automatic enrolment. They may ask you for help with this.

TPR has guidance and support available to help you to support your client in choosing a scheme that is right for their staff.

Automatic enrolment: What costs can your client expect to incur in setting up a pension scheme for automatic enrolment?

If you're helping your clients to choose a pension scheme, it's important that you understand their needs and help them make the right choices for their staff.

There are some pension schemes aimed at small employers that do not have set up or monthly charges for automatic enrolment, while other schemes may charge. It is important that clients weigh up the costs and charges against the level of services that the scheme will provide – some of the services may make running automatic enrolment easier over the long term.

TPR has guidance to help you support your clients to choose a pension scheme.

Automatic enrolment: Can payroll software help with automatic enrolment?

Many payroll providers already provide a module or an add-on for automatic enrolment that will work out who to put into a pension scheme, which earnings to assess, and how much your client and each member of staff needs to pay into the scheme. Payroll software can also help with your client's ongoing duties such as monitoring age/earnings of existing staff, and enrolling/writing to them as needed, as well as assessing new starters and processing leavers.

Find out which payroll software your client is using to see how it can help with automatic enrolment.


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