Pension providers’ software systems are broken and unable to cope with auto-enrolment, Paul Lindfield, director of wealth management at Sedulo Wealth Management, has said.
The Manchester-based adviser said: “The software systems are outdated and have been adapted to try and offer assessments and solutions. It is an arduous and clunky process which is both laborious and time-consuming.”
The process, according to Mr Lindfield, involves having to manually convert and upload data from payroll, which he said is prone to huge data errors, as well as human error as it involves a lot of cross-checking to ensure there are no problems with employees’ payments.
Mr Lindfield said it also meant that individuals have to do a lot of training across multiple systems with the same provider.
He said: “Providers have two packages – assessment software and then payment opt-outs and opt-ins managed on a different system. Advisers, employers and payroll all end up going back and forth on different systems.”
The solution, he said, was to integrate and simplify systems and change to a standard industry data upload template which could automatically be generated and prepopulated from payroll data.
“The current system means you have to touch the same piece of paper over and over again rather than just the once,” he added.
Mr Lindfield said that auto-enrolment should be the task of the payroll department, who can do the assessments and updates for the providers to run with.
Laurence Sanderson, financial consultant at Essex-based Stirling and Law, said: “Accountants who run payroll are largely sleepwalking into auto-enrolment. The payroll systems that many are using aren’t really up to the job for processing bulk AE. If they have 100 payroll clients it could take 30 plus hours to process them all if they intend to do the assessment and communications. Many accountants/payroll bureaus have not considered how this will affect their business.”