Darren Philp of B&CE, a not-for-profit financial services provider to construction employers, on helping contractors with auto-enrolment.
Britain’s oldest builder, R Durtnell & Sons, has joined nearly 28,000 other businesses in operating a pension arrangement under the new auto-enrolment regime.
Under auto-enrolment employers of all sizes have a duty to put eligible workers into a pension arrangement that meets certain standards, and to offer other workers the opportunity to join. Eligible workers are those aged between 22 and state pension age, and earning over £10,000 a year. Workers don’t have to stay in the pension scheme and can choose to opt out. However, any encouragement from employers to get workers to opt out is prohibited by law.
This is quite a revolution, with many employers and workers finding themselves engaging with pensions for the first time. Employers need to prepare in advance to move to the brave new world of auto-enrolment, work that might distract from the key business of running a company. And a particular challenge for construction companies, who often use temporary workers to fulfil specific projects, is that temporary workers come under the remit of the auto-enrolment requirements.
Key to the setting up and smooth running of an auto-enrolment arrangement are the interfaces between the employer, the payroll, and the administrator of the arrangement. The employer needs to identify the different types of worker – classified as eligible, non-eligible and entitled – both when the arrangement is first set up and on an on-going basis, as workers come and go. The payroll system must then be able to take that information so that the correct pension contribution deductions are made. Finally, the payroll files must be able to be uploaded smoothly to the administrator of the arrangement.
R Durtnell & Sons faced just such challenges, when it started to consider what auto-enrolment would mean for it and its workers.
The company has a venerable history. It has been trading continuously since its founding in 1591, with the business handed down from father to son, so far for 13 generations. It attributes its success not just to the uninterrupted family ownership, but also to the quality of its employees. Therefore the company has always made sure that it has treated its employees well, offering good terms, conditions and benefits.
Although used to providing pensions for its workers, the company was concerned about the extra burden of auto-enrolment, particularly the smooth running of the system with its payroll.
B&CE has been working with R Durtnell & Sons from 1943 – it was one of our earliest clients. Before auto-enrolment, most of their weekly employees were in B&CE’s ‘EasyBuild’ group pension scheme, which has operated for the past 10 years. When it came to choosing the right auto-enrolment solution the company turned to B&CE’s The People’s Pension, designed as a perfect fit for the new requirements.
The People’s Pension, like B&CE itself, is run on a not-for-profit basis. Now with over one million people enrolled, more and more companies are using it as an affordable and hassle-free way to meet their new duties.
As pension provider to many companies with already complex payrolls, we realise how important it is to get this right, and are always keen to ensure that the auto-enrolment process is as easy as possible. We provide a variety of guides and help online, as well as a customer service team.
Since getting the first payroll run under its belt, R Durtnell & Sons found the file upload process straightforward and has been able to manage it itself. R Durtnell & Sons’ finance director, Simon Routh, explained: “Although we were worried about the file upload, it proved to be really easy. The system runs so smoothly it practically runs itself.”
Darren Philp is director of policy and market engagement at B&CE, which provides workplace pensions, employee accident cover, employee life cover and employee healthcare. www.thepeoplespension.co.uk
