Personal Pension  

Nest questions if industry can cope with 2016 AE staging

Nest questions if industry can cope with 2016 AE staging

The National Employment Savings Trust has called into question how the industry will cope with the number of employers due to stage into the auto-enrolment system in 2016.

Nest’s executive director of product and marketing Gavin Perera Betts said 84 per cent of small and micro employers yet to stage don’t have an active pension scheme in place and many may not have thought about pensions before.

He argued that simply expecting 1.8 million small employers to become pension experts overnight was impractical and tools must be developed to make their compliance with AE requirements easier and make volumes staging more manageable.

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Mr Betts said 2016 will see Nest’s web services payroll integration tool available through more payroll providers.

He said: “With this, payroll software can pick up and crunch all the data needed for auto-enrolment and send it across to Nest automatically.

His comments come after in mid-December, the Work and Pensions Committee launched an inquiry into automatic enrolment, asking for written evidence on the implementation of the legislation so far, especially the effects on small and micro employers.

The review will also look at the suitability of the auto-enrolment earnings threshold and minimum contribution rates, along with analysis of delays to the implementation of increases to minimum contributions that were announced in the Autumn Statement.

Chris Daems, director at advice firm Cervello Financial Planning, said: “Gavin is correct to say that technology is the key to support most small and micro employers automatic enrolment process.

“Payroll technology is playing an important part in the process as well as technology can also help employs complete the tasks they need to comply as well as select an appropriate pension scheme.

“These innovations are going to be fundamental in supporting the micro and small business automatic enrolment marketplace over the next couple of years.”