ERSONAL DEVELOPMENT
Training: above and beyond
Ian Neale, director at Aries Insight , discusses the importance
T raining is often the first casualty when time or budget come under pressure. Indeed, some organisations spend remarkably little on equipping staff to deliver the best possible service. Training in a process ought to enable employees to understand and be able to explain why certain steps are required – to cover the ‘why’ as well as the ‘what’, ‘when’ and ‘how’, in other words. Nowhere is this more vividly apparent than in pensions. We identified the problem thirty years ago and, during the 1990s, built a suite of computer-based training courses on pension transfers, equal treatment, revenue limits, trusteeship and administration, and later pensions on divorce. We recognised the necessity to make them interactive, with content relating to practical examples, and natural language recognition of typed answers to self-testing questions. (But we didn’t make any money.) Our most successful course was on trusteeship and administration, launched in 1996 to accompany the introduction of member-nominated trustees. Since then The Pensions Regulator has developed the online trustee toolkit and made its completion by pension scheme trustees practically mandatory. In smaller organisations, human resources and payroll professionals often double up as pension administrators. This has become common since the advent of auto-enrolment, which has brought a quite formidable sets of hoops and hurdles. More recently, the government’s response to the pandemic, the Coronavirus Job Retention Scheme (CJRS), introduced new complications. For example, it doesn’t necessarily fully cover pension contributions: employers can only claim for
the statutory minimum 3% of qualifying earnings within 80% of salary (capped at £2,500). This illustrates the way pensions legislation interacts and overlaps with employment law. You might be familiar with many other instances (e.g. contributions paid via salary sacrifice and during maternity leave). Then there is the tax side: have you yet had to advise a senior colleague on the tapered annual allowance, or manage a ‘scheme pays’ request from an employee faced with an annual allowance charge? Some of this stuff can be documented with flowcharts and decision tree models for staff to follow – immensely valuable because, let’s face it, some things don’t crop up regularly at all. Even where a reliable process can be discerned with confidence, it needs monitoring because the government keeps changing the rules. (In the context of the CJRS, I might even say ‘making it up as it goes along’.) Someone really has to keep on top of training and education needs. That’s not to say one person in an organisation has to become the fount of all knowledge; partnerships with specialist advisers and compliance consultants will often be a better solution. Alternatively, subscribing to web-based information services accessible 24/7 might fit the bill; at least, as far as the ‘what’ and the ‘when’ are concerned, as the ‘how’ is often up to the organisation to decide. But I come back to the ‘why’, especially when the questioner wants to know why they have to find a piece of information, or why some desired objective is unattainable. Here, context is king: often there are many factors involved, some of which the questioner might not be aware are relevant.
To give a simple example, we’ve often been asked a complicated question about pension rights without being told whether the scheme in question is a defined benefit or defined contribution arrangement. In pensions, we often say the past is never history. This is what makes long experience particularly valuable. It’s not only the way the legislation has ramified over the years into the dense thicket we try to untangle daily. Pensions don’t run on rails: human beings run them, and humans make mistakes. Sorting out what should have happened and how to rectify a mistake, sometimes years later, can demand imagination as well as an encyclopaedic memory – which of course is in short supply. In many cases, there might be no-one left in the organisation who was around when the pension scheme was set up, or who knows where to find documentation. In-house pensions administration is rare these days. Defined benefit schemes are mostly closed anyway, with admin outsourced ages ago; the trouble here is that the contract might have passed through more than one third-party administrator, with gaps in data not always being filled accurately. Since 2012 employers have had to get to grips with auto-enrolment (AE), mostly choosing master trusts to fulfil their duties. Though it might be that your employer never paid a penny into any pension scheme before AE came along, that doesn’t get you off the hook. Employees (and employers) will still look to their in-house pensions, payroll and reward colleagues to help them understand their options because, remember, we’re now in a world where freedom and choice is the mantra. You need resources and opportunities for continuing professional development; and ideally also experience, contacts, a good memory – and a training budget. n
...enable employees to understand and be able to explain why certain steps are required...
| Professional in Payroll, Pensions and Reward | July/August 2020 | Issue 62 20
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