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Auto enrolment 'engagement' and calculation tool
The Pensions Regulator ('TPR') has announced that following consultation they will develop a basic automatic enrolment tool. The basic tool should be available to download from TPR’s website by the end of 2015.
TPR consulted earlier this year on proposals to develop a basic tool to support those employers who use HMRC's Basic PAYE Tools (BPT) to carry out their payroll function. HMRC's BPT are used by many small employers to calculate PAYE, national insurance contributions and statutory payments such as Statutory Maternity Pay but has no pension function.
The majority of consultation responses were supportive of the TPR's proposal, although some payroll firms and pension schemes were against the regulator developing a new tool.
Executive Director for Automatic Enrolment Charles Counsell said:
'We will continue to recommend that BPT users consider using software with integrated automatic enrolment functionality, but by developing this basic contribution calculation tool we aim to ensure that BPT users have access to the help they need to support compliance.
The decision to develop a basic tool is recognition that significant numbers of BPT users will not seek a more integrated solution and will attempt manual calculations. This is another example of how The Pensions Regulator seeks to develop new ways to ensure we are meeting the needs of the diverse group of employers due to stage in the coming years.'
TPR has also issued the third edition of 'Automatic enrolment: Commentary and analysis', which reports on the impact of automatic enrolment and the increasing participation in workplace pension schemes. The commentary states:
- By March 2015, over 5.2 million workers had been successfully automatically enrolled since the reforms began in 2012, an increase of more than 2.2 million workers from 2014, and 4.2 million from 2013.
- Automatic enrolment is helping to turn around the decade-long decline in pension provision, with 59% of all employees now active members of a pension scheme, compared with just 47% in 2012. This increase suggests that pension saving is now becoming the norm.
- The pensions landscape has been transformed as the majority of people are enrolled into defined contribution schemes. We have witnessed the growth in master trusts – 94% of employers who chose a trust-based scheme opted for a master trust.
- We now expect that significantly more employers will be subject to automatic enrolment duties than originally anticipated, mainly due to an increase in the number of new companies that have started up, and fewer going out of business than was forecast. We have revised the staging profile accordingly, so that it reflects the 1.8 million employers we expect to help through the automatic enrolment process from now until 2018.
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Internet links: Press release Commentary