In this hypothetical scenario, a financial advisor is setting up a NEST pension scheme and then handing over day to day administration to the payroll team.
When the advisor is consulting with the employer they will make a number of decisions such as what basis of earnings will be used to calculate pension contributions, what percentage the employer will contribute and whether the employer will delay entry into the scheme. It is obviously crucial that this is clearly communicated to the person running the payroll so that they can deduct the correct contributions at the correct time.
There is however some less obvious information that needs to be communicated, when the advisor sets up a payment method they will assign a name to that method within the scheme set up. Letâ€™s say for example that they name it â€œBank Currentâ€, When the person running the payroll needs to generate the csv file to send to the pension provider, they will need to enter this reference exactly as it was entered when the scheme was set up or the upload will fail. The same is also true of employee groups.
Whilst this example is NEST specific, these extra field types are common in most schemes. You can see therefore that for Auto-enrolment to run smoothly, advisors must be a good understanding of the whole process and not just the section they are advising on.