Can employers “do auto-enrolment” themselves?

self-service 2

August is the silly month when nothing much happens. Well unless you are coding a mammoth self-service tool that aims to be the answer to 1.2m small company’s pension challenges.

So while the world watches the cricket and puts their feet up with the kids, the daunty band of designers, coders , operating managers- oops and me, worry over “business logic” “employer journey’s” and “output screens” in readiness for our forthcoming launch.

What’s so unusual about our project is the precision of our market segmentation. The breakdown of the 1.2m employees into monthly staging dates spread over the next four and a half years means we are not building one model but a succession of subtly changing models each targeting a slightly different customer.

Our aim is to put the employer back in control of the decision on “what workplace pension should we have”. But what might seem motherhood and apple pie to the 1000 employee staging next month is way beyond the ken of the proverbial fish and chip shop staging in 2017.

The temptation is to see the market as homogenous and build a solution for everyone. This meets the aspirations of the set and go venture capitalist who wants to sleep well dreaming “we have built it- they will come”.

Empowering the tranche of employers staging in each quarter means a dynamic proposition, a dynamic marketing strategy and the flexibility within the proposition to adapt.

Watching a sailing race on Sunday, I saw a boat capsize because it pursued the same tactics when the wind increased as when it was calm. Other boats took in reefs and were able to cope with the brief squall.

As we consider the years ahead, it is clear where the “staging squalls” of auto-enrolment will come, they are the spikes on the chart and they need to be planned for.

It is unreasonable to suppose that employers will understand the added risk of being in one of these spikes. Quite rightly they are busy managing their businesses and can expect their suppliers to keep them appraised of these risks and solutions on the market.

By suppliers I mean anyone who has an interest in the employer’s compliance and employee benefits, be that the accountant, the bank manager, the financial consultant or the provider of payroll and HR software or managed services.

But here is the problem, unlike the Government’s requirements for Real Time Information which touched just the back office , auto-enrolment touches all parts of the business. It impacts finance through the cash call of the contributions, operations through the disruption to existing HR and payroll services and most importantly staff welfare through the deductions of contributions and the necessary communication of what is going on.

The detailed process maps we work to stretch over 30 screens, the help facility already runs to 25,000 words and the spreadsheet that holds the business logic looks like the blueprint for Apollo 11!

In short, the undertaking to manage this massive migration from unpensioned to pensioned is underway but is proving every bit as challenging as we were told it would be.

“Can we provide a self-service model that enables employers to stage auto-enrolment without recourse to advice?”

The jury is still out. If we cannot prove it can be done in 2014, I fear that politicians pandering to popular sentiment may pull the plug on staging from 2016 and hang the employees of smaller companies out to dry.

The answer is with the financial services industry, with payroll and HR software manufacturers and with the providers of pensions themselves. This is a time to get behind propositions such as that set out to enable a “self-service solution”.

Today (Monday 5th August) we are running a lunch at the Counting House, 50 Cornhill London (next to the Bank) 12 for 12.30 – the topic under debate is can we expect employers to stage by themselves or do we need recourse to the traditional advisory model. If you have read this on the morning and are in London, come along- it’s £15 into the kitty, you get a cracking lunch, an engaging discussion and the opportunity to meet others who give a damn!

self service 4

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
This entry was posted in advice gap, auto-enrolment, pensions, Popcorn Pensions and tagged , , , , , , , , . Bookmark the permalink.

2 Responses to Can employers “do auto-enrolment” themselves?

  1. Great article Henry. Whilst smaller employers may want advice to guide them through the auto enrolment process the key issue is a supply and demand one.

    Whilst as a business we are heavily engaged in the auto enrolment market (however this currently means working with larger employers with staging dates over the course of the next 6 months) we seem to be the exception rather than the rule.

    Even though the market to help large and medium sized businesses is clear I can’t see us continuing to work under the current business model when it comes to very small and micro businesses due to the reduction in the profitability in the work. We’ll have to look at providing an alternative route.

    A ‘self run’ option seems the best approach for these employers….however we’re still finding issues with auto enrolment awareness within the professional communities we work with (and yes this includes other financial planners and IFA’s as well as law and accountancy firms).

    Unfortunately I can’t make lunch today….but I’ve heard some good things about it! I’ll make sure I try to get there next time diary permitting!

  2. Ian Davidson says:

    Henry, interesting post. To me the biggest risk, as you rightly point out, is that this, or the next government, change the rules of the pension game as they so often have in the past. Or, and here comes the bogeyman, the EEC either “intervene” directly or, even more likely, do something else that has an indirect effect on AEl

Leave a Reply