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The Do's and Dont's of Offering Auto Enrolment as a Service

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This is what you must be offering as a chargeable service (and clients should pay for it). Finding the right pricing strategy will be a key factor to increasing profits. If the price is set too high, clients may go elsewhere. If the price is set too low, the opportunity to increase revenue may be missed.

Fundamentally, the price a bureau charges will need to cover any additional investment in software and additional hours involved in processing AE. With 750,000 employers to stage in 2017, the opportunity is there to survive and remain profitable.

We will also look at whether there are other value added considerations you should be bringing to your clients attention.

Auto Enrolment Overview
Auto Enrolment as a Service
Pricing Auto Enrolment Services
Tiered Pricing Strategy
Monthly Retainer Fee
Price List Approach
Choosing the Right Tools for AE
How can BrightPay Help?
The impact of AE on your clients contracts of employment

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The Do's and Dont's of Offering Auto Enrolment as a Service

  1. 1. The webinar will begin shortly... The Dos & Don'ts of Offering Auto Enrolment Services By Rachel Hynes
  2. 2. By Rachel Hynes The Dos & Don'ts of Offering Auto Enrolment Services
  3. 3. By Laura Murphy The impact of AE on your clients contracts of employment
  4. 4. Q&A Session Questions Tab or #BPWebinars On Demand This session is being recorded REC Q&A
  5. 5. Webinar Agenda Auto Enrolment Overview Auto Enrolment as a Service Pricing Auto Enrolment Services Tiered Pricing Strategy Monthly Retainer Fee Price List Approach Choosing the Right Tools for AE How BrightPay can help? Impact on Contracts of Employment
  6. 6. Auto Enrolment Overview
  7. 7. Entitled Workers Non Eligible Jobholders Eligible Jobholders Auto Enrolment Overview
  8. 8. Eligible Jobholders • Aged between 22 and State Pension age • Earn more that £10,000 per year • Work, or ordinarily work, in the UK Auto Enrolment Overview
  9. 9. • Set up a pension scheme with a qualifying workplace pension provider • No eligible jobholders? No need to set up a pension scheme • If an employee chooses to opt in or join, a scheme must then be set up Auto Enrolment Overview
  10. 10. • At staging employers must assess all employees • If an employee is an eligible jobholder they must be enrolled into a workplace pension scheme Auto Enrolment Overview
  11. 11. • ALL employees must receive communications within six weeks • Employees must be notified of auto enrolment and how it affects them • Postponed employees must also receive communications within six weeks Auto Enrolment Overview
  12. 12. • Ongoing duties:  Handling opt-outs and refunds  Managing opt-in and joining requests  Making deductions and contributions  Monitoring employees each pay period  Sending contributions to the pension provider Auto Enrolment Overview
  13. 13. • Employers must complete a declaration of compliance • Must be completed within 5 months of staging date • Notifies TPR that you have complied with AE Auto Enrolment Overview
  14. 14. Auto Enrolment as a Service
  15. 15. Auto Enrolment as a Service Employers with less than 50 employees of an accountants client base is made up of: 90%
  16. 16. • Are you ready or prepared to take on auto enrolment business? • What level of support / information will you offer? • Are you prepared for employers coming to you last minute? Auto Enrolment as a Service
  17. 17. • Offer a complete end to end solution • Bureaus can generate income and enhance client relationships • A new platform to reach and upsell to • Employers will be happier to consolidate all their outsourced services to one person or advisor Auto Enrolment as a Service
  18. 18. Value Proposition for your Clients 1. Time saving 2. Cost saving 3. Focus on core areas 4. Expertise
  19. 19. Pricing Auto Enrolment Services
  20. 20. Pricing Auto Enrolment Services • Auto enrolment as a chargeable service – clients should expect to pay more • Finding the right price is key to increasing profits – Price set too high: clients may go elsewhere – Price set too low: may miss opportunity to increase profits • Price must cover any additional investment in software and additional time carrying out payroll
  21. 21. Pricing Auto Enrolment Services • Prices vary dramatically across the market • Dependent on the no. of employees and the level of AE services • Offer a free AE consultation with clients • Explain the various administrative aspects of AE
  22. 22. Pricing Auto Enrolment Services • The three main advantages: 1) Understand how much is involved in AE 2) Much more receptive to your fee quotation 3) Eliminate your clients seeking AE advice from you for free
  23. 23. Pricing Auto Enrolment Services Tiered Pricing Structure Monthly Retainer Fee Price List Strategy
  24. 24. Tiered Pricing Strategy
  25. 25. 1. Tiered Pricing Strategy “A tiered strategy is where a bureau can provide AE services at different price points for different levels of service” • For example, shipping costs when purchasing online • Clearly outlines the value and price differences between different levels of service • Allows clients to choose a price point that suits their budget
  26. 26. • Employee Assessment • Enrolling Employees Tier 1 • AE Communications Tier 2 • Processing opt ins/outs Tier 4 • Postponement • Declaration of Compliance • Ongoing AE duties Tier 3 How to charge for AE services?
  27. 27. Monthly Retainer Fee
  28. 28. 2. Monthly Retainer Fee “A monthly retainer fee is an agreed amount to be paid on a monthly basis for completion of an agreed set of tasks” • Increase a clients monthly charge for processing their clients payroll and auto enrolment • Spreads the cost of auto enrolment over a period of time, rather than a large fee initially • A simple way to include ongoing AE duties • Consistent & predictable revenue stream each month
  29. 29. 2. Monthly Retainer Fee “A monthly retainer fee is an agreed amount to be paid on a monthly basis for completion of an agreed set of tasks” • Appeals to clients as it guarantees the bureau will carry out specific AE task each month • Understand what payroll and auto enrolment will cost, allowing them to plan accordingly • Ongoing duties should be automated with minimal time required
  30. 30. Price List Approach
  31. 31. 3. Price List Strategy “A price list is a simple way to present a list of services – breaks down each AE process into bite-sized pieces for your clients.” • Some bureaus may decide to only handle some auto enrolment tasks • Demonstrates exactly what is being offered as a chargeable service • Cost itemisation: justifies the price charged for AE
  32. 32. 3. Price List Strategy “A price list is a simple way to present a list of services – breaks down each AE process into bite-sized pieces for your clients.” • Option to offer bundle deals • Allows clients to measure progress of the project • Breaks down each element, helping to organise and define the total work scope of the project • Simplify the clients understanding of the AE services offered
  33. 33. Pricing Auto Enrolment Services • A clear pricing structure will allow any bureau to cost and schedule auto enrolment duties for each client • Bureaus can establish clarity while effectively increasing profits • Client can decide which of the tasks they want to outsource / process in-house
  34. 34. Pricing Auto Enrolment Services • Bureaus can increase revenue by offering AE as a chargeable service • Avoid increasing own business costs – additional software charges will reduce any profits • Auto enrolment is a function that should be included in the cost of payroll software. • Ensure software will streamline AE tasks allowing bureaus to maximise profits
  35. 35. Choosing the Right Tools for AE
  36. 36. Choosing the Right AE Tools • Some software providers can automate auto enrolment for you • Look for a solution that offers auto enrolment automation at no extra cost • TPR advises that an integrated payroll and auto enrolment solution with make life easier
  37. 37. Pension Scheme Selection • It’s the employer’s responsibility to choose a pension scheme • Each pension provider requires information from the payroll software in a specific format • BrightPay currently supports 17 pension providers
  38. 38. Application Program Interface • API – payroll and pension integration • Direct integration allows users to send pension data with just one click • Other NEST APIs – Validate set up details and approve payments • API’s improve AE compliance and reduce workload & errors
  39. 39. Enrolling Employees • All eligible jobholders must be automatically enrolled into a pension scheme – Eligible jobholders have the option to opt out – Non-eligible jobholders have the option to opt in – Entitled workers have the option to join • Some software providers offer batch processing which further reduces the workload
  40. 40. Deductions and Contributions • Employer must make pension deductions and contribute to the scheme • Managing this manually can be difficult
  41. 41. Communications • Must communicate with all workers to tell them how AE applies to them • Must be done in writing within 6 weeks of the staging date • Payroll software should be able to produce the communications for you
  42. 42. Postponement • Employer have the option to postpone AE for up to 3 months • Re-assess employees after postponement period has ended • Postponement is streamlined with some payroll systems
  43. 43. How can BrightPay help?
  44. 44. Impact on Contracts of Employment
  45. 45. What’s the issue • “The Company operates a stakeholder scheme, which you are eligible to join. Full details are available from the HR Department.” (Common standard pension clause)
  46. 46. What to include • Amend contract clause – stating compliance with auto enrolment • Issue a letter varying pension clause
  47. 47. Qualifying Schemes
  48. 48. Bureau Licence: £199 + VAT per year Employment Contracts & Staff Handbooks
  49. 49. Bureau Licence: £229 + VAT per tax year Payroll and Auto Enrolment Software
  50. 50. Questions & Answers For more information visit www.brightpay.co.uk, email sales@brightpay.co.uk or phone 0845 3004 304

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