COMPLIANCE
the number complaining that they would prefer their payslip posted to home halving to 19%. ● Payment methods – Once again Bacs is consistently the most common payment method across all pay frequencies, as it has been for the duration of this research. With the digital age presenting alternative methods of payment, the research this year explored whether employees had requested a different payment method. No respondents had changed their primary payment method in the last two years, although 3% confirmed that their employees had requested a change in payment method, with one requesting their payment be made directly to a charity and, in stark contrast to the digital advances in payment technology, the remainder said that their employees had requested payment by cheque. What else did the research reveal? As well as payslip trends, this research is also used to explore experiences of other key topics. When the research was undertaken in December 2019 the government still intended that off-payroll working rules would extend to the private sector in April 2020, but this has since been delayed until April 2021 due to the COVID-19 pandemic. We also took the opportunity to investigate experiences and attitudes to the conclusion of the automatic enrolment (AE) roll-out. ● Awareness of changes to the off- payroll rules in the private sector – The rules will mean that employers classed as medium or large must assess the status of all their contractors to determine if they need to operate pay as you earn and NICs. Reassuringly, 99% of respondents were aware of this change, with 63% of respondents believing they will be affected by the changes. At the time this research was undertaken in December 2019, 63% said they had already begun to make plans to assess their existing contractors and communicate this change in responsibilities to them. ● Additional costs – Although 61% of respondents agreed they had raised the possibility of additional costs, the anecdotal responses suggest that
Chart 4
in the future. These options included lowering the age threshold from 22 to 18, along with removing the link to the class 1 NICs lower earnings limit so that contributions are calculated from the first pound earned. The responses showed that opinion is strongly divided, with many believing that these suggestions would enable more people to build up a bigger pension pot, but others felt equally strongly that employers, and in some cases employees, would simply not be able to afford to pay the contributions. ● Cyclical re-enrolment – Three years after AE staging, employers must re-enrol eligible jobholders who aren’t currently a member of the pension scheme. 92% of respondents have been through re- enrolment, with 74% finding the process fairly or very easy. One respondent commented that the most difficult part was explaining the situation to employees with 60% of respondents stating that they had received questions from workers who had previously opted out, wondering why they had been re-enrolled. Several respondents commented that their workers were unhappy at being re-enrolled and blamed their employers rather than the legislation. Two thirds (67%) reported that the majority of employees who had previously opted out, opted out again when re- enrolled. n Thank you The CIPP policy and research team would like to thank all those who responded, as we would not be able to undertake this research each year without the support and input from our members and the profession. The full report is available on the CIPP’s website.
this message is not necessarily being heard within businesses. Only 18% of respondents confirmed that they had already estimated the additional costs involved, with 80% commenting that this work is still ongoing. Whilst the postponement of the roll-out until April 2021 may give businesses more time to prepare, that is of course dependent on the length and impact on business of COVID-19. Automatic enrolment When roll-out of AE began back in 2012 it brought additional administrative burdens for employers. However, with all employers now automatically enrolling their workers into a pension scheme, and the phased increase of contributions complete, AE is now considered to be business as usual. This research set out to understand whether AE continues to bring additional burden. ● Impact of the minimum contribution increase – More than a third of respondents (37%) stated that they had members asking to leave the pension scheme following the increase to minimum contributions. The increase also brought additional work for 54% of respondents required to intervene to amend the contribution rates. (Chart 4) ● Further increases to contributions – In December 2017 the Department for Work and Pensions published the report Automatic Enrolment Review 2017: Maintaining the Momentum , which discussed a range of possible options for increasing pension savings
...the majority of employees who had previously opted out, opted out again...
| Professional in Payroll, Pensions and Reward | May 2020 | Issue 60 30
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