CIPP AAP pensionsync

AUTO ENROLMENT FOR AGENTS

Will Lovegrove CEO pensionsync

AAT / CIPP hot topic event Manchester 3rd March 2016

pensionsync : think of us as Switzerland in the Europe of AE We’re in the middle. We’re big on efficiency. We don’t pick sides.

• Designing your service

• Engaging ‘slow to respond’ clients

• Pension scheme selection

• Different software options

• Automatic re-enrolment

CIPP asked us to speak on these points:

We asked these successful payroll agents to contribute

DESIGNING YOUR

SERVICE

Designing your service

We asked the agents if they offered the following

services to their clients.

• Educate your clients on AE - a general briefing

• Support them through the selection of a pension scheme

• Open a pension scheme with a pension provider on behalf of your client

• Process AE each payroll period

• Create statutory communications

• Create & upload data to the pension provider

100% of respondents offered a service in each of

these service areas

Service design is consistentIt wasn’t always like this, but after processing AE for 3 years and for approx 10% of their Clients, successful agents have settled on a modus operandi

PRICINGPricing

PRICING

The pricing structure is based on client size, fixed monthly fee for 1 to 3 employees and a per

payslip basis on a pricing scale for 4 employees and more.

Currently charged a fixed fee for assessment and enrolment. Additional fees apply for :

Communications - charged per letter Output file – charged per file

PRICING

Fee based on size of payroll and which provider has been selected.

Pricing is done on a bespoke basis – based on payroll size for processing. Letters

are charged per head.

PRICING

Up to 75 employees we have a banded fixed monthly fee based on the

number of employees. On 76 and over we charge per payslip.

No additional fees – AE is included as standard. However we charge additional for

‘setting up’ a pension.

PRICING

We charge per employee fee. We have fixed prices for 3 major master trusts. In some cases

we have a fixed monthly fee.

We charge for set up of pension scheme, We charge for declaration of compliance form

We charge for assessing, communications and uploads to pension company.

UNLIKE SERVICE DESIGN, PRICING HAS NOT STABILISED.

IT IS STILL BESPOKE & COMPLEX.

BUT IT WILL NORMALISE PROBABLY WITHIN 24 MONTHS

WHAT IS THE APPROXIMATE PAYROLL CHARGE % INCREASE TO

CLIENTS

Depends on size of the client: typically 25%

30%

50%

NOW Pensions: 16% - 70%NEST & Peoples: 96% - 147%

Others: 16% – 150%Client Self Manages in full: 0%

Client Self Manages in Part: 3% - 10%

40% - 45%

DO YOU OFFER DIFFERENTIAL PRICING?

2

5

No Yes

Differential pricing is attributed to the variances in difficulty of administrating with different pension

providers. Its not popular, but does exist.

DIFFERENTIAL PRICING EXISTS

It has been necessary to create differential pricing based on provider as some have much more

onerous procedures than others taking a lot more time. Some are also prone to more

errors so time has to be factored in for these.

Pricing varies across the market. Pricing is driven by how much

‘manual’ time is needed to process AE. E.g. the bits that cannot be

done by software

ENGAGING SLOW

CLIENTS

Slow clients

ENGAGING SLOW TO RESPOND CLIENTS

90% of clients are slow to respond. Fees structured so the less time left to set up

AE the more it costs the client.

Regular email, phone calls. There are some clients who still have a head in the sand

approach but very few now, most are receptive.


80% of our clients are slow to respond. Yes – we email them

every month and if they have not done anything 2 months before staging we

telephone.


I do remind them of the hefty fines if they don’t comply and continue to

bury their head in the sand.

The most I have had to contact a client is 7 calls! Generally we have settled AE by the first

meeting, after the first phone call.


No - but we are considering some options

Hard to say [a percentage] as majority not staging until later this year. We simply repeatedly chase slow to

respond clients.

AE is a reluctant market. You need a strategy for

engaging Clients

PENSION SCHEME

SELECTION

Choosing a scheme

PENSION SCHEME SELECTION

We tell them we have a scheme with SMART where we will do everything for them.

However we do say they have a choice of provider and need to satisfy themselves that the scheme we provide is suitable for

their requirements.

Our sister company is a Financial Planner and we do refer our Clients to them if they need

support.

We recommended speaking to an IFA for pension advice.

SIMPLIFYING THE PROCESS & PROPOSITION IS A GOOD STRATEGY

FOR AGENTS.

BUT SUCCESSFUL AGENTS EMPHASIS THAT THERE IS CHOICE IN THE

MARKET.


90% of clients ask for help selecting a scheme. We refer all our Clients to

our internal FAs

95% of Clients ask for help. We send a list of providers available and request they do the appropriate research to choose a scheme.

We do refer Clients to an IFA.

90% OF CLIENTS ASK FOR SUPPORT CHOOSING A

SCHEME


We have a strategic relationship with an IFA and refer our clients to them.

67% of clients need help with scheme selection. We currently operate with only with 3 providers:

NEST, People’s & NOW.We are looking to expand this though

We do refer Clients to a partner adviser

FORMING A STRATEGIC RELATIONSHIP WITH AN FINANCIAL ADVISER IS A POPULAR STRATEGY


We offer Pension Playpen as an assistance to choosing their scheme or speak to an IFA. We do have a strategic relationship with

an IFA

95% of clients need help selecting a scheme.

If they don’t want an IFA we offer the Pension Playpen which is a fantastic platform to help select a

pension.

ROBO-ADVICE IS AN

ALTERNATIVE

DO YOU OFFER GUIDANCE?

6

2

No Yes

Guidance is not advice. Guidance is a presentation of the facts, but without a resulting recommendation. The majority of agents understand the difference and are comfortable with giving Guidance.

DO YOU REFER TO TPR WEBSITE?

7

1

No Yes

Overwhelmingly the majority refer their clients to the TPR website

Your Clients will ask you for help. You should formulate options to help your clients choose a scheme.

Smaller Clients may not want to pay for an IFA. Guidance may be enough. Emerging software tools will

mean there is a low-cost alternative.

DIFFERENT SOFTWARE OPTIONSSoftware

DIFFERENT SOFTWARE OPTIONS

We use our own software!

We use our own software!


we prefer to manage the workplace assessments [in payroll] as it sits comfortably in the

payroll process.

Differential pricing: No we don’t, as it is hard enough for our clients to have the extra charges, so some we win and

they take no time and some take longer – but using pensionsync this will be a thing of the past.


We have not considered changing payroll software because together with pensionsync it

provides all the functionality we need

We did consider changing and looked at

other payroll software last year, but after major updates and changes due to AE we are happy

with our payroll functionality


I do see it as unfair that software providers are charging

additionally for it- AE is simply a part of payroll it’s not optional.

You cannot administer AE without software. Different software does different things (at the moment).

Your choice of software will impact your range of services and efficiency.

Generally speaking Payroll Bureaus are reluctant to switch software, but many small bureaus operate

multiple payroll software products in parallel

Software will in time help normalise the work effort to administrate pensions, create ubiquitous equal access to different

providers, and so ultimately normalise the pricing structure for pension administration

in the market.

So what are your big takeaways from todays session…

AE administration is complex & now part of a Payroll

Administrators job.

EDUCATE YOUR CLIENTS ABOUT AE

Regular newslettersSeminars

Targeted correspondence as Client approaches Staging DateFree workforce assessment report

All of our payroll staff have been trained on AE and we have held

seminars in conjunction with the Pension Regulator. We have ensured our systems can

make the process as seamless as possible. Clients want the simplest route to be compliant and

are more than happy to follow our guidance.

EDUCATE YOUR STAFF ABOUT AE

You will have to invest in upfront training to service your Clients with AE administration

Or you should consider outsourcing AE to experts

WITH THANKS TO:

Liz Robins [email protected]

Nicky Godard-Dady [email protected]

Hayley Whitten [email protected]

Michelle Webb [email protected]

Caroline Gibbs [email protected]

Matthew Duro [email protected]

Robin Mead [email protected]

Suzanne Gallagher [email protected]

mailto:[email protected]








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