Corporate Advisers and Payroll…the new dream team

Corporate Advisers and Payroll…the new dream team

Malcolm Goodwin, Aviva’s Head of Sales, Workplace Savings and Retirement discusses the importance of working together post auto-enrolment.

With the main Auto Enrolment (AE) staging dates now finished, it’s become clear there has been a fundamental shift in the way that employers ensure they keep onside with the AE rules.

Before AE, any new employees who joined a company were simply added onto a New Joiners CSV file which was uploaded into the workplace pension provider’s back office systems. 

AE has changed all that. 

A workforce now has to be assessed on a regular basis to check for employees who might have triggered the AE earnings limit, and to see if any new staff need to be enrolled. When AE was first introduced in 2012, the payroll industry was busy with RTI implementation. As a result, workplace pension providers stepped into this space and most came out with some form of stand-alone AE assessment tools.

Once RTI implementation was complete, those payroll software providers began to develop their own AE assessment modules. Usually built into payroll systems, these modules are rapidly taking over pension providers’ stand-alone AE assessment tools. 

No need to play ‘pass the parcel’ with employee data

Rather than fighting against this tide, Aviva has embraced it by working a lot closer with payroll software providers.  The alternative is to take employee data out of payroll and send it to a third party for assessment, only for that third party to then send it back to the employer, who would then  put it back into payroll before sending it on yet again, usually via a CSV file, to a pension provider. This is clearly inefficient and costly, both in terms of manpower and time. 

In the SME market, the production of CSV files from payroll is also waning. New technology (APIs) now allows payroll bureaux and workplace pension providers to integrate their systems, so that any changes in payroll automatically update the workplace pension provider’s records. 

In this scenario, it’s critical that financial advisers understand four things to ensure the smooth running of the workplace pension scheme:

  • Where are the payroll functions taking place – in-house or outsourced to a bureau?
  • What payroll software is being used?
  •  How often payroll is being run and by what processes?
  • Where is the ongoing assessment of workers for AE taking place?

For example, where a particular payroll software provider has integrated its systems with certain workplace pension providers, to then recommend one that isn’t integrated with this payroll may not be the best course of action for the employer. Already we are starting to see payroll bureaux putting up their fees to employers who are asking them to run workplace pension schemes with providers who haven’t integrated with the payroll software that they use – either that or recommending a switch to one that has. 

The spotlight falls on the payroll industry

The result of this is that payroll is starting to hold workplace pension providers and financial advisers to account on the way they work with them and their wider propositions. At Aviva we value the payroll industry now occupying this thought leadership space on workplace pensions. 

These days, it’s a relatively simple process to switch payroll software providers. We are therefore working with forward-thinking suppliers who see the benefits of a close relationship with workplace pension providers. 

But you don’t need to take our word for it. This is what Liz Robins, Managing Partner of payroll services provider AS Robins LLP, had to say on the subject:

“We are now working together extremely closely with pension providers.  Had this been suggested to me five years ago I would have laughed – payroll and pension’ never mixed! It was like oil and water…  I am very lucky to say that when meeting companies, like Aviva, they knew that this could not be a clunky process…

When taking over a payroll now, the first question I ask is ‘who's your pension provider?’. If we cannot integrate we will have to charge the client more as it takes time and additional resource.”

You can find more information on Aviva’s Workplace Pension – and how it works with Payroll Software – by visiting Aviva Payroll Integration.

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