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Post Info TOPIC: Auto Enrolment - which Managment Trust option to choose


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Auto Enrolment - which Managment Trust option to choose


I do payroll for a number of clients - and want to offer an auto enrolment option, but can't decide between NOW Pensions or Peoples Pension - what are your experiences and thoughts.....

Which is the better value for money.............

Which would you go for........and why..?

Which do you think is the better one..........and why??

Look forward to your thoughts

Carol



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Carol Saunders
Lady of Ledger Book Keeping
Telford, Shropshire



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Hi Carol,

I don't think that anyone can advice without it being classified as financial advice.

There's all sorts of advice been issued by the likes of ICAEW and ACCA to tell members to stay away from giving advice which I appreciate causes an issue as you send clients off to an advisor who bleeds them dry for what is at best a guess about which pension will perform better and advises the client on a provider that your software doesn't directly support.

The issue that everyone has is that if you give advice and its not the best advice then you could be sued to put the person in the position that they would have been in had they been given the best advice.

Personal view is distance yourself as far as possible from auto enrolement and just let all of the financial advisors get the pants sued off them.



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Shaun

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Master Book-keeper

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Hi Carol, as Shaun says, you can't advise employers which pension scheme to join, it has to be their choice.  I intend mainly working with the pension schemes that don't cost the employer a fee but if the employer chooses a different scheme and I can accommodate it I will. 

Hi Shaun, the financial advisors won't run the payroll scheme, they'll merely put it in place for a big fat fee. I agree that there could be implications further down the line with regard to advice, but I'll be pitching my services at small businesses, and doing everything I can to help them get ae up and running.  Once the employer has chosen the scheme to join, the rest of it is just admin and there will be a need for small payroll providers because it'll be too much of a headache (imo) for the small business.



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John 

 

 

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Hi John,

completely appreciated. my response was purely around the advising that we can't advise. I know that we're stuck with the shitty potentially less lucrative end of the stick (as always) as client seems willing to pay for advice but won't expect to pay any more for processing payroll on top of the pension payments that many simply cannot afford (and thats before it moves up to a total 8% contribution!).

As a linked matter I was actually looking at Moneysoft a couple of days back. I've been using 12pay for quite a while and never had a problem with it. But, as AE is now to be an integral part of payroll I'm adverse to paying even 1p more to run it than we would pay for any other part of payroll.

I note that with Moneysoft it's included with payroll (as if CIS) whereas with 12pay it's addition (as is CIS) which add's pretty much as much again as the basic package.

It will be sad to let 12pay go but I fear that with Tom no longer being at the helm combined with the thought of havig to pay for add on's that should be part of the software from the get go its pretty much making the decision for me.

I fear that this short sighted pensions move based on all of the NI contributions having been spent on things that it was never meant for will simply see many employers going back to offshoring work... Good isn't it when you can spend the Christmas kitty and then tell the people who had been contributing to it that they need to save with a different Christmas kitty but it's alright as they'll make someone else pay loads of money towards it.

God knows why Theo Paphitis has anything to do with that advert. I'm bloody in... When is someone going to wake up Government to the fact that small businesses cannot afford the burdens that are being inflicted upon them and this move will actually have a seriously adverse effect upon UK employment as companies will not only stop employing people but also be looking to cut numbers they already have (tell me that you are not asked several times a day by clients how they can take on / retain staff but get them off payroll?).

Of course, rules around contract/temp staff are also being eternally tightened because the government focus is upon that being the loophole that threatens their plans and misses completely the elephant in the corner of the room which is offshore outsourcing centres rubbing their hands in glee at the changes being implemented in the UK.

And don't get me onto the staff in that advert looking all happy at the promises of extra pension income completely oblivious to their impending P45's.

Let me look into a crystal ball... I see many skilled jobs being offshored and unskilled jobs going to the youngest workers who will be let go before becoming entitled to pension contributions.

All in all, it's exactly what one would expect from Government... It will all be a great success and nobody will join the dots between excalating unemployment figures and Government Pensions policy... But, if they don't implement it then they cannot aford to pay pensions that people have already contributed towards.

I really, really think that we need to send all of the Government on a basic bookkeping course and make all of them run small businesses from scratch in the real world before being let loose on attempting to run the country.

Ok, I'm stepping away from the soap box.... lol.

Night John.

p.s. I'm conservative but it doesn't mean that I have to give them an easy time when I can see that they're getting it horribly wrong... And on that matter, shouldn't they have abolished IR35 by now as they promised to do over six years ago.... I sense a strongly worded letter to my MP coming along... Perhaps though not quite as strongly as the letter sent to Gordon Brown whilst he was still chancellor when I sent him a couple of AA batteries as it was obvious that the one's in his calculator were not working.

Grrrr....



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Shaun

Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.



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Shaun

There was an article in this months FSB - Fears over cost of pensions - from this article.

www.enrolsme.com/media/1206/better-business.jpg

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Regards

Trevor



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PS - Yes Moneysoft seem to have gone Auto enrolment friendly and included in the base price. I dont think it is as comprehensive as the paid for 12pay module, but may be just enough to make it work.

Would be interesting to hear other views on this ?

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Trevor



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I have used People's Pension for a client and they have brilliant customer service. I haven't used the other two from the Master Trust. The good news is that NEST are going to introduce an API later this year which should enable the uploading of contributions at a press of a button, much like RTI is now, so no more need to download on to a csv and then upload into their website portal.

Costs are all restricted to (I think) 0.75% of the contributions for all AE compliant pensions which is why many existing company pensions are not compliant as they have higher charges. Shaun, currently there is no legislation for employer contributions being 8%, it is 3% employer and 5% employee contribution (or more likely 4% and 1% hmrc contribution). Having said that, part of the futility of this legislation is that the contributions are too small for many people to make a blind bit of difference to their future financial well being in my opinion (I AM NOT ADVISING HERE!)...on the subject of advice, parts of AE is unregulated, so although you cannot advise individuals I believe you are able to say to clients something along the lines of 'we are using NEST/Peoples Pension/Now for our clients but we are happy to work with your IFA', you may want to suggest also that your charges will be somewhat less than the IFA's thousands. I have so far heard of IFA fees in excess of £6k to set up and £100 per month management fee...no idea what is done for that management fee as it seems it is pretty much all run through the payroll to me. The other thing is that you can tell clients the facts as this does not constitute advice.

I think there will be a general lack of wage increases to contra the pension contributions but I don't think there will be wholesale redundancies based on this, that was supposed to happen when the minimum wage was introduced but it didn't materialise. If the economy picks up then jobs will be safe.

How much are people looking to charge for AE? Both for setting it up and then the added burden of running the payroll, sending out the correspondence, uploading to the pension providers, completing the declaration of compliance etc?

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Rob
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Hi Rob,

Is that a major corporation that the IFA is charging £6k and 1.2k per year to? Or perhaps a golfing buddy? Or member of the same masonic lodge?

I cannot see any entrepeneurial firm accepting such ridiculous fee levels for something that will give them absolutely no benefit to their business.

The promise of a better pension will not increase staff loyalty or productivity.

The only reason to provide the service is to avoid being fined for not providing it.

Even though its not Government that is the (direct) beneficiary it simply comes down to another tax on business and for all of the Government statistics on the upturn in the economy I am not seeing the growth figures to support losing the additional costs associated with increased minimum wage and AE (let alone inflated IFA costs).

I'm sure that like myself Rob you spend a lot of time telling people that its the bottom line that matters, not the top one. In an improving economy we are going to see that top line going up but the bottom one potentially going in the other direction and they will be looking to us to help fix what is going wrong with their businesses.

Basic capitalism. People start businesses to make money. If they are not making enough money then they will either close their businesses or attempt to continue their businesses with less staff doing more work, or outsourcing what work they can to take payroll numbers down.

Any businessman who does not contemplate those difficult options should possibly not be in business.

Hope that your having a good day matey. This thread could turn into an interesting idiological debate.

All the best,

Shaun.

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Shaun

Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.



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TrevorD wrote:

Shaun

There was an article in this months FSB - Fears over cost of pensions - from this article.

www.enrolsme.com/media/1206/better-business.jpg


Many thanks for the link Trevor,

That article pretty much reflects the feedback that I'm getting on this as something thats been sold to employee's to buy votes but something not at all wanted by the businesses who the Government needs / expects to pay for those votes.

Cynic, me... Ok, it's a fair cop.

 

 



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Shaun

Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.



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Hi Everyone

Thanks for all the replies. I'm not looking to advise my clients in any way - I was just looking to choose a provider to go with, so that I can say to my clients that I'm set up with xxx should they choose not to get additional FSA advice and just want to be compliant, so are happy to go with whatever I'm set up with. 

I've narrowed my choices to either NOW Pensions or Peoples Pension, but just wanted peoples views or experiences on which may be the easier to deal with - or peoples OPINION on which may be better than the other to work with, and for what reason.

Rob thanks for your comments - with regards to costs, it's awkward to work out if one of them is a lot more expensive than the other, then the yearly fee is 0.75% with PP, and only 0.5% with NOW Pensions, but then NOW charge £1.50 per month, which I believe is taken out of the employees contribution. Does this make it a very expensive pension????

With regards to charges, I was thinking of charging an extra £1 per payslip to administer (on top of my normal payroll charge), plus an initial set up fee of around £50 to £100 depending on how many employees the client has. I believe this would cover my costs - I'm not out for making a large profit over it, but I don't want to loose out by it either. This would be if my client decides to go with the Master Trust I've gone with - which again, I believe there is a difference when it comes to the letters that need to go out to the employees at staging.........NOW Pensions do this for you.........but I believe we have to do it if we choose Peoples Pension.....is that correct?

 



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Carol Saunders
Lady of Ledger Book Keeping
Telford, Shropshire



Master Book-keeper

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RobH wrote:

...on the subject of advice, parts of AE is unregulated, so although you cannot advise individuals I believe you are able to say to clients something along the lines of 'we are using NEST/Peoples Pension/Now for our clients but we are happy to work with your IFA', you may want to suggest also that your charges will be somewhat less than the IFA's thousands.

How much are people looking to charge for AE? Both for setting it up and then the added burden of running the payroll, sending out the correspondence, uploading to the pension providers, completing the declaration of compliance etc?


 That's pretty much how I intend to pitch it Rob.  There is absolutely no need to get an IFA involved, and it's simply unaffordable for the small business. I'm looking at Peoples Pension, Nest and Now 

I haven't yet formulated my charges properly, but there will be a set up charge of between £100-£150 to do the pensions admin (sending out letters and opt in/outs etc) and an extra £1-£1.50 per payslip.  (Preferably I would like to keep to the lower amounts but I need to cost it properly first)



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John 

 

 

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Expert

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Shaun the client in question is a big concern (I only do the payroll) and I think the IFA is a mate of the FD there, but I did talk to him about potentially referring him and he said he wouldn't look at anything below £6k. This is the problem, the bigger pensions aren't going to be interested in the smaller clients as they can't make it pay and so come January 2017 when the so called (and rather insensitively so) AE tsunami hits, it will be mainly the Master Trust taking up the slack. The important thing here is to get things sorted early so they are compliant before the whole thing crashes.

I certainly don't disagree that the burdens on small business are crazy but with an ageing population something needs to happen, my guess is that this is just the start and soon the government will realise that an 8% contribution on salaries of around £20k probably won't be enough. In Australia there is no opting out and the contributions are 12%...I would imagine we will head that way in the future.

I'm looking at a set up charge of £500 but with a sliding scale for discount reducing the cost to £150 if we set up 12 months before the staging date. I am looking to add £2 per payslip which effectively will double the charge of payroll but I think the extra work and responsibility warrants this.

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Rob
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Master Book-keeper

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Shamus wrote:

Hi John,

completely appreciated. my response was purely around the advising that we can't advise. I know that we're stuck with the shitty potentially less lucrative end of the stick (as always) as client seems willing to pay for advice but won't expect to pay any more for processing payroll on top of the pension payments that many simply cannot afford (and thats before it moves up to a total 8% contribution!).

As a linked matter I was actually looking at Moneysoft a couple of days back. I've been using 12pay for quite a while and never had a problem with it. But, as AE is now to be an integral part of payroll I'm adverse to paying even 1p more to run it than we would pay for any other part of payroll.

I'm considering moving over to Brightpay, it's about £100 dearer, but it's AE functionality is vastly superior to Moneysoft (although I think that will change as the small business staging dates loom nearer, and Moneysoft shift up a gear.)

I note that with Moneysoft it's included with payroll (as if CIS) whereas with 12pay it's addition (as is CIS) which add's pretty much as much again as the basic package.

I switched from 12pay to Moneysoft when I took a CIS client on. I prefer Moneysoft as it's quite easy to use with a better "feel" to it but was perfectly happy with 12pay.

p.s. I'm conservative but it doesn't mean that I have to give them an easy time when I can see that they're getting it horribly wrong... And on that matter, shouldn't they have abolished IR35 by now as they promised to do over six years ago.... I sense a strongly worded letter to my MP coming along... Perhaps though not quite as strongly as the letter sent to Gordon Brown whilst he was still chancellor when I sent him a couple of AA batteries as it was obvious that the one's in his calculator were not working.

          That's where you went wrong, his calculator took one of those little oblong batteries (PP3?)  I therefore blame you for the 2008 crash biggrinbiggrin

I pretty much agree with your comments and I'm centre left politically smile



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John 

 

 

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Master Book-keeper

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Leger wrote:
Shamus wrote:

Hi John,

completely appreciated. my response was purely around the advising that we can't advise. I know that we're stuck with the shitty potentially less lucrative end of the stick (as always) as client seems willing to pay for advice but won't expect to pay any more for processing payroll on top of the pension payments that many simply cannot afford (and thats before it moves up to a total 8% contribution!).

As a linked matter I was actually looking at Moneysoft a couple of days back. I've been using 12pay for quite a while and never had a problem with it. But, as AE is now to be an integral part of payroll I'm adverse to paying even 1p more to run it than we would pay for any other part of payroll.

I'm considering moving over to Brightpay, it's about £100 dearer, but it's AE functionality is vastly superior to Moneysoft (although I think that will change as the small business staging dates loom nearer, and Moneysoft shift up a gear.)



Hi John

Not in response to AE, but with regards to your Brightpay comment - before you do consider this........I got in on AWeb a few weeks ago

Someone else posted - ''Here are the limitations of BP    - No RTI batch filing;  No P11Ds and  No CIS.   No emailing within BP of P30s, P45. You can email payslips with BP.     I understand they are working on all the above.''

The response from Brightpay when I hinted that this should have been on a couple of years ago was :- The P11D functionality will be available for the 15/16 year end. In the meantime, it should be noted that our CIS Assistant software is available FOC to all BrightPay customers. Furthermore, full CIS Integration will be available in our 16/17 version.

---------------------------------------------------------------------------

yes they give it away as a free add on at the moment - but its not fully integrated so I would say stay where you are!!!!!!!!!

 

 



-- Edited by Cheshire on Sunday 9th of August 2015 02:54:17 PM

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 Joanne 

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Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

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Master Book-keeper

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Thanks Joanne, was wondering where you'd got to.  By the sounds of it you're pulled out. a good thing in one respect but probably doesn't help the stress levels.

Thanks for the heads up on Brightpay, I will still trial it but if Moneysoft can do the things I want it to, I will definitely stay put.



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John 

 

 

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Master Book-keeper

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No problem John. Ive been working stupid hours and not had a break other than a few days at Christmas, since last October. only having one now as got family coming in the week, but they picked a time when 95% of my clients VAT is due, just taking on another new one, plus extra for another who has exploded, plus the footy season has just started so I will be busier than ever with my favourite client. I need staff! Or perhaps just a cleaner, gardener and a cook!

Missed you lot on here!

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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position



Master Book-keeper

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The VAT can wait a week (unless its June!) so relax and enjoy your time with family.

If you're that busy normally it might be worth taking someone on to do some of the routine stuff? I'd apply for the cleaner, gardener, cook myself but I'd probably make a mess of your tree house and moat!  And it'll be a bit tricky climbing up that ladder with your a la carte meal of beans on toast. smile



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John 

 

 

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Master Book-keeper

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I must put a lift in, then the beans won't roll off the plate. Is that still tax deductible though......oh dear, no it won't be. Oh heck I will have one anyway.

I did have a member of staff for a few months but he drove me absolutely nuts.

I will be chilling from tomorrow, well as much as you can chill with a 10 year old nephew as a shadow. I can't wait!



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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position



Master Book-keeper

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You're allowed to claim subsistence when away overnight, but erm, probably not when you're only a few yards from home lol.

Yep, just had our 12 year old nephew to stay for a couple of weeks, managed to take 3 days off work and we did Knowsley, Blackpool and Bowling but I think he was more than happy the rest of the time holed up in my son's bedroom with my son on the Xbox!!

 



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John 

 

 

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Master Book-keeper

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Oh if Im going to spend the night away from home Im going to do it in style - 5 star all the way!!!

Between age 10 -12 is just pushing it...when mostly they are still nice but almost ready to be firmly pushed towards their parents at all times when the stroppy teenage years are lurking. My nephew wants to go to see RAF planes and I want to go and see RAF pilots so we will both be kept happy one of the days. Maybe Anglesey for a day or two plus MOSI in Manchester followed by a visit to my son who lives on the same road as MOSI as he has no time of work whilst they are here. Plus BBQ even if it rains! Wont be exciting as the holiday to California he has just been on but we should have fun.

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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position



Master Book-keeper

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Sounds exciting - have a great time.



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John 

 

 

 Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.



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Add-On Announced for HMRC Basic Tools


We will continue to recommend that BPT users consider using software with integrated automatic enrolment functionality, but by developing this basic contribution calculation tool we aim to ensure that BPT users have access to the help they need to support compliance.

The decision to develop a basic tool is recognition that significant numbers of BPT users will not seek a more integrated solution and will attempt manual calculations......."




http://www.thepensionsregulator.gov.uk/press/pn15-38.aspx



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