Workplace pensions or occupational pensions have proven their mettle. Despite even the pandemic situation, WPP deductions have persisted as religiously as PAYE and NIC. When it comes to payroll related administration, interestingly employers find that normal payroll functions are a tad easier to run as compared to pensions where it is not only deductions that need to be made. With contribution uploads, maintaining sufficient bank balance and the hefty £400 penalty employers have their work cut out for them.
Why Outsourcing Work Place Pensions makes sense
Less administration more work
As an employer getting your actual business work done is what should be of utmost priority to you. Therefore, the less you have to deal with employee queries about their salaries or inaccurate deductions and such like would be more to the purpose. Pensions aren’t without a lot of management issues, right from submitting the declaration of compliance to choosing the pension scheme, you need to be prepared for the long haul. This is especially true if you have more employees or if you have more than a monthly payroll cycle to deal with.
In such situations, outsourcing workplace pensions might be the best bet as ultimately this is money we are talking about. Miscalculated deductions or errors due to sheer ignorance would only lead to further time wastage and complications. Plus, with The Pensions Regulator playing such an active part it is better to play safe than be sorry.
Making the most out of pensions
New employees can be postponed up to 3 months before they are put into a pension scheme. However, these employees need to be enrolled first. If you outsource your workplace pensions you need not worry about these legalities. Instead, your priority can be focusing on your business. Furthermore, running the pensions module in the payroll software itself is quite a challenge as there are intricacies involved in making it a job best left to the experts.
A more cost-effective alternative
Many payroll bureaus offer a pensions package as well and this does work out to be a win-win as you have one person looking after things. You need not worry about pensions reports or the uploading process or even email communications from the pension provider. If you have someone to look after this aspect of your payroll your time is freed up at an even fractional cost if you choose to outsource. Though there are employers who wonder whether outsourcing if ideal – will the payroll provider be well versed enough in compliance? Interesting, the National Employment Savings Trust (NEST) too has chosen to outsource back-office work to India to reduce the administrative burden. And NEST is run by a trustee board and was government setup or rather tailor-made towards the workplace pensions concept.
Furthermore, how pension deductions are to take place, the inclusion of voluntary members and the like all add stress as an employer needs to be aware of exactly what he or she is signing up for. Thus, getting the best professional advice and more importantly, someone to process the right things is something that would make things easier. Outsourcing thus will enable you to do just that. Previously, from March to June employers for instance could reclaim the WPP contributions they made in the furlough pay of the employee. Then from July due to flexi-furlough only the WPP contributions on the hours not worked was the eligible amount to claim back. Keeping abreast with all these tidbits of information and updates would prove a challenge to the most informed. Considering this, outsourcing these services is indeed the way to go.
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