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The Carval HR Software Blog

Auto-enrolment: 5 things you need to tell your payroll bureau

Posted by Emma Clare

18/05/15 11:33

If you are one of the 45,000 SME employers that are due to stage for pensions auto-enrolment in 2015 (and over one million in 2016 and 2017), you may well outsource payroll. 

If you're staging for auto-enrolment you may turn to your payroll bureau or accountant for help. Our latest blog post will help you give some thought to:

  • Your pension scheme rules - with a handy questionnaire to download
  • Your pension provider's data requirements
  • Who will carry out the assessment process
  • Who will communicate with your employees


1) Have you already staged?

If you have then your payroll bureau will need to know the initial staging date and any other key dates like opt-out dates, postponement and reassessment dates for each employee.

2) Are all of your pensions schemes qualifying schemes?

If not employees may end up in two or more pension schemes. Can your payroll provider handle this?

3) What are the scheme rules?

You may think that you have just a “standard” pension scheme. However unfortunately there’s really no such thing. Your payroll provider will need to know if it's a pre or post tax deduction, or if it is a salary exchange type scheme. If it’s a salary exchange scheme, what do you want done with the Employers NI saving? Do you keep it or pay it into the employees pension fund?

What pay elements are pensionable? Just because a pay element is included in the Qualifying earnings calculation that doesn’t necessarily mean that it’s pensionable. An example of this would be that overtime would be included as Qualifying earnings but is not necessarily pensionable as per the scheme rules.

Providing a detailed definition of your pension scheme rules really is very important. Carval's Payroll Bureau provides a questionnaire which prompts clients to think about their scheme rules in detail - you can download a copy below.

Download a sample pensions questionnaire >>

4) What data is required by your pensions provider/s?

Before AE went live, Payroll Software providers like Carval had requested that pension providers get together and agree on a standard data template. Unfortunately even though we’re a few steps closer to this, the standard template has yet to materialise. So currently payrollers are stuck with having to provide data in different formats to each pensions provider.

You pensions provider will have a detailed specification surrounding what the file format should be, headings, date format and so on. You will need to give this to your bureau or accountant.

It’s important to clarify the detail for each data item. You might have a field that says salary, but does that mean Annual salary, pay period salary or pensionable salary? If the employee is part time, they might want the FTE salary. Don’t take anything for granted.

Ensure that the specification is one defined by the Pension provider not a third party and badger them about anything that’s open to interpretation - you may get charged if your bureau has to redesign the data extract because you gave them the wrong information.

You should allow plenty of time for set-up. The back and forth with test files between yourselves – bureau– pensions provider/third party will undoubtedly take longer than you expect.

5) Who’s responsible for assessment and communications?


The options available to you at each stage of the above will depend on the services offered by:

  • Your accountant or payroll bureau
  • Your pension provider
  • Whether you are using a third party or intermediary

Assessment is typically carried out by your payroll provider. Some payroll bureaux are able to cover the end to end process, that is; the assessment of employees, communications to employees and to produce an output file to send to your pensions provider. This is undoubtably the most straightforward option - but not one that all providers will have the capability to offer.

Sometimes pension providers will carry out employee communications for you. 

You may decide to utilise the services of a specialist third party or intermediary. Your payroll bureau will usually still need to do the assessment and provide you with details of who has been AE’d, become an eligible worker etc. but sometimes they will be required to send a pre-defined data file to the third party who assess the employees and then notify you regarding employee status.

Using a third party for assessment may on the face of it seem like a simpler option, but there can be pitfalls - for one it makes the payroll process significantly longer, which can be a real problem if you have weekly paid employees.

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Topics: Outsourced Payroll

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