Auto-enrolment checklist

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...the nuts and bolts of your auto-enrolment project


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YOUR AUTO-ENROLMENT CHECKLIST

INTRODUCTION

For a job as big as managing the auto-enrolment changes it’s important to know what has been completed and what still lies in front of you to give you the re-assurance that everything is in hand.

Getting the planning and project management right at

the outset can help you see the path ahead and ensure

everyone knows their roles and responsibilities. To help

with this we’ve produced our “Auto-enrolment checklist”,

outlining every step that needs to be taken when preparing

for auto-enrolment. It can be used by people at the start

of their project, or as a means of checking everything has

been done for those well entrenched in the world of auto-

enrolment.

We’ve broken the stages of the checklist down into

sections, each looking at a different aspect of the

project:

1. PROJECT - page 3This looks at the mechanics of managing the project and provides advice on good project maintenance.

2. REVIEW - page 4What needs to be examined before you start the project?

3. SCHEME - page 5The aspects of getting your pension scheme set up that need to be investigated.

4. PROCESS - page 6Helping to get the right processes established for the smooth running of your auto-enrolment project.

5. PEOPLE - page 7How to deal with the most important resource in the project.

6. REPORTING - page 8Remembering to tell everyone how well it is all going.

7. AUTO-ENROLMENT CHECKLIST - page 9Guidance on the individual areas within yourauto-enrolment project.

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• Appoint a project team – Getting everyone involved

who needs to be involved is critical. It’s no good

making a decision that affects payroll without payroll

being there. It will only lead to last minute changes and

obstacles to overcome in the future. As a minimum we

recommend the following areas are represented:

HR Pension ProviderPayroll Pension AdviserPension department Payroll Provider

• Confirmrolesandresponsibilities– Every well

run project should have a similar structure. A project

sponsor or director, a project manager and the project

team members. It is important to be clear about what

these people do in terms of their project responsibility

but also which individual tasks are assigned to them.

For example, who is going to look at processes? Who

will develop the communication strategy? Who will liaise

with the pension provider?

• Set SMART Objectives – For some of you the

objective may just be to have a compliant auto-

enrolment scheme in place by your staging date.

However, this change does present you with an

opportunity to offer a pension scheme that will be a true

benefit for your employees.

• Understand, identify and mitigate risks – An

important first step of any project is to understand the

challenges you might face. Think wider than just the

immediate project, for example is the company going

through a re-structure? Then make sure you have a

plan in place to mitigate these risks.

• Agree the project budget – This will be important not

only for understanding the funding available for items

such as systems and process changes, but also will

help when looking at potential contribution structures.

• Create a detailed project plan – Now you understand

your objectives, responsibilities, risks and budget it’s

time to get the plan down on paper! Our checklist will

provide you with the basics but it’s important to create a

full plan as well.

1. PROJECT

Start off as you mean to go on by getting your project set up correctly. Whether you are using PRINCE2 methodology or just good old common sense, there are a few important tasks to undertake.

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• Scheme – If you currently have a scheme in place is it

suitable for auto-enrolment? Does it have any barriers

to entry? Are the contribution levels acceptable? Will

your current provider accept your auto-enrolment

population? If there is no scheme in place look at the

reasons as to why this has been the case in the past.

• Processes – With so many different business areas

involved you need to check if your current processes

are fit for purpose. Does data get to payroll on time

every month? Is this data in a different format for each

department? By reviewing these early you’ll know what

processes need to be improved and where there could

be potential sticking points.

• People – Understanding your workforce is critical

to how auto-enrolment will affect you as a business.

By conducting an initial review you will get a better

picture of the types of action you will need to take for

different employees and which category the bulk of your

workforce sits in.

• Reporting – How do you currently track how your

pension scheme is performing? Do you know how

many people are in the current scheme and their level

of contributions? This is an important area to review to

ensure you can comply with the Regulator’s request for

management information.

• Cost – At the end of the day, how much is this all going

to cost you? Once you have an indicative view of the

make-up of your workforce you can look at producing

a basic cost analysis for items such as contributions.

It’s also important to remember to factor in costs for

additional resource to manage auto-enrolment and

costs for logistical items such as production and

delivery of the required communication.

2. REVIEW

Reviewing what is currently in place is a good first step in your project. It lets you know where you are and what you need to do to get to where you want to be. The key areas to review are:

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• Agree your preferred scheme design – This might

sound straight forward, but in reality there are a lot of

different factors to take into account. For example, what

contribution structure will you look to introduce and

will this be the same for all employees? Do you want a

one size fits all scheme, or a two tier scheme splitting

the auto-enrolment population from existing members?

This is where you can ensure your scheme meets the

objectives you have set and identify what changes need

to be made from your existing scheme.

• Identify and agree the consultancy support required

– Unfortunately, obtaining a scheme that matches

your preferred design is not as easy as it sounds.

This is where you may wish to engage professional

support to help you understand your NEST’s from your

NOW:Pensions, and to identify what is possible in terms

of scheme design.

• Conduct a full market review – The best way to find

the most competitive scheme you can that meets your

goals, is to go out to the whole of the market. Again,

this is where professional consultancy services can help

by leveraging their relationships and knowledge of the

market to get the best scheme for you. They could also

help you run a beauty parade to select your provider.

• Confirmedtermsreceivedinwritingfromyour

chosen provider – Once you have chosen your

provider it is important to get it detailed in writing exactly

what the terms agreed are. This is crucial to ensure

that everyone involved in the process has the same

understanding of what is being delivered and there can

be no unwanted surprises.

3. SCHEME

When all is said and done, auto-enrolment is about the provision of a workplace pension scheme. Therefore, for many, especially those without a qualifying scheme, this will be the most important section of the project. So what needs to be taken into account when looking at the scheme element of your auto-enrolment project?

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• Create and document a full process map – You’ll

soon realise there’s more to auto-enrolment than meets

the eye. We’ve identified 31 key processes that need

to take place to get the best results. Documenting

and circulating this to all will help you to develop your

working practices and understand your requirements for

support.

• Assess process integration – Use the auto-enrolment

process map to understand how the new actions

integrate with your existing processes. Identify the gaps

and come up with solutions to fill these.

• Confirmcapabilitiesandresponsibilities– Again

using your process map assess whether your business

is set up to manage them. Do you have the necessary

resource? Who will have responsibility for managing

specific processes? Do you need the support of

a system to manage these? If you are using an

external support system such as software providers or

outsourced advisers it is also important to meet your

account manager to understand their responsibilities

and capabilities.

• View a demonstration of your chosen system – If

your checks identify the need for a system solution to

help manage auto-enrolment, one of the most important

things you can do is see a demonstration of it. Not just

screenshots or a presentation of what can be offered,

but a live working demonstration. By doing this you’ll

know if it is going to meet your requirements.

• Establish data transfer protocols – With HR, Payroll,

Pension providers and many more involved putting a

robust data transfer protocol in place, and testing it,

is an important step in planning your auto-enrolment

processes.

• Undertake a full system/process testing phase – As

a project progresses it might feel like you won’t have

time for testing to ensure everything is set up. However,

getting it right in the relative calm of a test environment

is a much wiser step than waiting until your staging

date.

4. PROCESS

The experience of many who have auto-enrolled already is that getting the processes right is as important as getting the scheme right. This is where the involvement of all of the project group will be crucial to ensure every aspect is covered.

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• Obtain employee data and validate it – Getting the

correct data on your employees will ensure they are

categorised and treated correctly in auto-enrolment.

However, it is not just a case of pulling this data from

internal systems and re-using it. As it will come from

different areas within the business and potentially

different systems it is more than likely to be in different

formats. There will be a need to validate this data to

ensure it is fit for purpose, especially if it will be placed

into a new system to manage auto-enrolment.

• Undertake worker assessment – Once you have the

data in its correct format you will need to assess it to

understand the categories your workers fall into. This

will determine how they are treated in auto-enrolment.

However, it’s important to remember this is not a one off

task, and will need to be completed on a regular basis.

• Creation of your communication strategy – Now

you know which categories your employees fit into you

need to let them know how they will be affected by

auto-enrolment. The Pensions Regulator has produced

a series of letters that include the regulated information

you need to provide, but will this be sufficient? It’s worth

considering some campaigns here to raise employee

awareness, which could include posters, 1-2-1

meetings, presentations, online activity and much more.

Good communication will help you achieve your initial

project objectives.

• Production of communication – Once the

communication strategy is decided you will then need

to produce the material. You might need to draft in the

support of graphic designers, copywriters or online

developers here depending on the strategy you are

pursuing.

• Delivery of communication – Even if you are just

using the letters produced by the Regulator you still

need to consider the logistics of getting these to your

employees. Who will print them? What will the postage

costs be? Who will distribute them?

5. PEOPLE

As is always said, people are the most important part of any business. Therefore, they need to be considered within the project planning. The two aspects that need to be reviewed are the assessment and categorisation of your employees, and how you will communicate to them about the changes that will affect them.

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• Understand your reporting requirements – Look

at the reports required by the Regulator and ensure

you can obtain this information. Also look at the initial

project objectives and ensure your reporting is set up to

measure performance against these.

• Amend reporting capabilities – If your current

reporting capabilities are not sufficient you will have to

update these so that you can get the information you

need.

• Review audit trail procedures – where various

different communications are being sent to employees

it is important to ensure an audit trail exists that can

demonstrate when communications were sent and

received, and how employees were notified of any

changes in their circumstances relating to auto-

enrolment. This will also help with any potential HR

disputes in the long run.

• Test reporting processes – When you have decided

the level of reporting you need, and updated your

systems and processes accordingly it is worthwhile

doing a test run of the reports. This allows you to be

sure that they provide you with all the information you

require.

6. REPORTING

Whether you are interested in the finer details of the pension scheme or not, it is important you have robust reporting and governance procedures so that you are able to supply the Regulator with the information they require.

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7. AUTO-ENROLMENT CHECKLIST

This checklist has been designed to help you with your project planning. It can be used at the outset of the project or as you move through it to ensure you have covered everything. Your full project plan will be more detailed, but this will give you guidance on the individual areas within an auto-enrolment project.

PROJECT

Task Responsibility Deadline RAG Status Completed Notes

Appoint a project team / /

Confirm roles and responsibilities

/ /

Set SMART project objectives

/ /

Understand, identify and mitigate risks

/ /

Agree the project budget / /

Create a detailed project plan / /

REVIEW


Review existing scheme / /

Review existing processes / /

Review impact on people / /

Review existing reporting capabilities

/ /

Review anticipated costs / /

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SCHEME


Agree preferred scheme design

/ /

Identify and agree consultancy support required

/ /

Conduct a full market review / /

Obtain confirmed terms in writing from provider

/ /

PROCESS


Create and document a full process map

/ /

Assess process integration / /

Confirm capabilities and responsibilities

/ /

View system demonstration / /

Establish data transfer protocols

/ /

Undertake system/process testing

/ /

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PEOPLE


Obtain and validate employee data

/ /

Undertake worker assessment

/ /

Create and agree communication strategy

/ /

Produce communication / /

Deliver communication strategy

/ /

REPORTING


Understand reporting requirements

/ /

Amend reporting capabilities where appropriate

/ /

Review and develop audit trail processes

/ /

Test reporting process / /

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Contact information

Telephone: 0870 242 8600Fax: 0870 242 8699

Web: www.johnsonfleming.comE-mail: [email protected]

Johnson Fleming Group LimitedFleming HouseBromsgrove Enterprise ParkBromsgroveB60 3AL

The content of this document is for information purposes only. Johnson Fleming’s views or opinions expressed within this document are based upon our experience and our understanding of the financial services market place at this time and should not be viewed as financial advice. The information contained within this document should not be viewed in isolation and is based on Johnson Fleming’s understanding of current UK legislation, which is subject to change. No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of Johnson Fleming Group Limited. Johnson Fleming Group Limited is authorised and regulated by the Financial Conduct Authority (FCA). Johnson Fleming Limited, Johnson Fleming Administration Services Limited and Johnson Fleming Services Limited are Appointed Representatives of Johnson Fleming Group Limited. Registered Office: Johnson Fleming Group Limited, Fleming House, Bromsgrove Enterprise Park, Bromsgrove, B60 3AL. JF120913

Auto-enrolment checklist

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