AE for SME


As we continue on the auto enrolment (AE) journey I have noticed that the audience is changing. It’s not solely a pension audience.

It has slowly moved out of the big pension departments, eased through the world of large firms and benefit consultants and emerged directly within the SME sector.

The conversations have changed, because the audience is different..

SME employers want to be empowered with information and guidance to enable them to self-serve their employees. They want to use the existing tools and systems at their disposal. They want cost and complexity kept to a minimum. They want to know how their Sage payroll pension system works, how it works with their staff and how they can use salary sacrifice and AE with both Sage and their current pension scheme.

Some people think it’s a software problem. Some think it’s a pension issue and some think it’s a payroll issue.

They want tools they are familiar with and trained on. They don’t need (or want) a new software and pension scheme package. They want to use tools that they are familiar with and use pension schemes they know about. They want expert advice, not snake oil.

There is a different model needed when advising on AE for SMEs. Some people think it’s a software problem. Some think it’s a pension issue and some think it’s a payroll issue.

What is it? Funny enough, it’s none of those and all of them at the same time.

Where’s the best place to start for your SME clients seeking advice on AE?

Start with the communications; easy to read, inviting and useful communications are key to the success of any AE implementation. Yes, mandatory communications can also be easy to read, inviting and useful.

Be agnostic about software. Be agnostic about the pension provider. Be agnostic about the snake oil called middleware.

Talking of religion, during a conversion at my grandson’s blessing, I was asked by a guest what I did for a living.  I only said pensions and AE. The lady guest took over.

Her employer was preparing for AE. I was given a full run down of what was happening, when and what it meant to her. The lady had no connection to pensions and wasn’t involved in the rollout, but had received the messages, understood them and was engaging with the process. It was a brilliant example of good communications and the positive effect of employee engagement!

I finished the conversation feeling strangely chuffed that we are getting through to employees whom previously had no connection with their workplace pension.

I like pensions. I have seen the benefits they bring. I have delivered the tax free cash cheques and the death benefit cheques. I know that they make a difference to real people in their real lives.

SMEs want clarity, purpose and benefits to communicate to their employees. They want it to work. But, they want it to work with their current payroll, their current pension and their current people. It’s about joining it all up and making it work.

They want to understand. And like the lady I met, we’ll know they do when they can explain to us the benefits of saving in their workplace pension.


About Author

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Dubbed by friends and colleagues “The Pensions Professor”, John Reynolds is widely acknowledged as one of the country’s leading experts in the financial services education sector. He has spent 20 years teaching, consulting, mentoring and writing on the subjects of pensions and investments. John’s unique ability to take his years of experience and technical knowledge and present it in an easy to understand format, has resulted in his talents being very much in demand. His portfolio of corporate clients include CII, Lloyds, Scottish Widows, Santander and Wesleyan; as well as numerous IFA clients whom he provides technical consultancy, mentoring and training on client case studies and staff training.. He has put his extensive expertise (and heart and soul!) into developing the expertpensions (EPL) proposition. EPL is a structured and interactive technical exam training programme for IFAs. It's designed to give financial advisors the required technical knowledge, study strategy and exam technique to confidently sit and pass the AF1, AF3, AF4 and AF5 exams. Its online, it's fully supported, structured and designed to help advisers reach Chartered Financial Planner status quicker. It's ready to help your advisers reach chartered status

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