Matt Waller explains how ‘middleware’ software enables companies to automate the admin processes of complying with auto-enrolment

When we talk about auto-enrolment, we tend to put it in the ‘pension’ bracket as it is the result of pension legislation. However, when you take a closer look at the processes required from employers to enrol, track, report on and communicate to their employees about auto-enrolment, it’s clear that in reality only around 10 per cent of what is needed is about the pension provision; the other 90 per cent of the work required is really more centred on administration.

We have been holding regional seminars for the past 18 months, talking to businesses across the UK about how they are going to tackle auto-enrolment and it has become clear that many are concerned about how they are going to be able to manage the added admin burden that auto-enrolment legislation brings.

This is where ‘middleware’ comes in. Middleware allows organisations to automate the process of auto-enrolment, freeing up HR, pensions and payroll staff to continue their usual role. A good middleware solution removes many of the manual tasks associated with auto-enrolment, such as worker assessment and reporting requirements. The system sits between your HR/Payroll system and your pension vehicle, automating all the tasks required and plugging any gaps.

What are the key benefits of middleware?

Potential to manage the entire process
A middleware solution enables an organisation to fully outsource and automate the administration of auto-enrolment. A combination of payroll system and pension provider technology can create gaps that need to be filled through internal resource – middleware plugs these gaps.

Single view of auto-enrolment
By offering a joined up, end-to-end service from assessment to reporting, middleware can support a single view of auto-enrolment, and as a direct consequence, compliance.

Independence
Some middleware providers are completely independent and free from affiliation with insurers and providers. This adds a level of legitimacy in the eyes of employees who might use the system for financial education or training, and means that if you change payroll or pension provider, it won’t mean that you’ll have to change your system as well.

Wider benefits awareness
With auto-enrolment propelling employee benefits into the spotlight, the communications issued around your staging date offer a great opportunity to communicate the other benefits you offer.

A middleware solution can help automate this process with bespoke email campaigns sent out to your employee base, whilst segmented messages can also go to specific populations.

What should you consider when choosing middleware?

Is it simple to use?
The fewer clicks the better. How simple is the system to use from both an employee and administrator’s perspective? Does the solution have a dedicated user experience team behind its development? Can the system be accessed via smartphone and tablet?

Is it future-proof?
Will the system you have in place be able to cope with future market and legislative changes? How efficient is the middleware solution at interfacing with the pension providers? Are you able to change pension provider easily if needed? As an example, if you Tupe in employees who have access to a better arrangement with a pension provider different to your own, how easy is it to link into the auto-enrolment process through the middleware technology?

Can I prove ROI?
With increasing pressure on budgets it is now more critical than ever to provide accurate statistics to support the ROI of a middleware solution. A good technology solution should have the ability to present the data it contains in a user friendly format, be it number of logins, National Insurance savings or contribution/fund selections made. The system should also be able to break down the figures by specific employee demographics such as location, age, and salary band.

So before asking yourself ‘why middleware?’, ask yourself if your organisation can cope with the burden of auto-enrolment internally. If the answer is no – or you’re unsure – middleware is likely to be able to give you the solution and peace of mind you need.

Matt Waller is CEO and founder at Benefex

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