Running pensioner payroll in the pandemic – The best of times and the worst of times

17 March 2021

At the start of 2020, we were managing 162 pensioner payrolls on an office-by-office basis. Two months later, Gary Potts was appointed as First Actuarial’s National Payroll Manager, and payroll operations merged into a national team.

And then the world went crazy.

As lockdown approached, the big question for First Actuarial’s payroll team was – how were we going to manage 162 payrolls and pay all their pensioners from home? Aside from getting to grips with the new structure, a real practical issue was that almost everyone worked on desktop computers rather than laptops. Thankfully the firm shared our concern, and the payroll team was prioritised in the race to equip every employee with a laptop before the country locked down.

A second challenge was the team’s payroll processes. We worked with printed reports and each payroll run would generate a file full of paperwork. The pandemic forced us to go paperless, almost overnight.

The worst possible time for our payroll team

For two specific reasons, lockdown could hardly have happened at a worse time of year – we were bang in the middle of annual pension increases and the tax year-end loomed. A real double whammy.

When First Actuarial’s administration calculates the annual pension increases, we import the new amounts into our payroll system. Reconciling the payroll from the previous month to the current one is complicated not only by these increases, but also by any irregular or suspended payments and, sadly, deaths.

That would be painful enough for one payroll, but we had 162 to manage, and the vast majority of them schedule their increases for April. Previously, people had colleagues on hand who could help straight away. The team pulled through, and managed to hit all its targets and deadlines, but it was a tough time.

Across our 175 payrolls, we pay almost £24m gross each month to 37,235 pensioners, including 1,208 who live overseas.

Although the end of the tax year is less onerous than it was before HMRC introduced Real-Time Information, the volume of payrolls we’re handling makes it very challenging. And we still have to check the figures before we submit them.

2020 delivered yet another difficulty when the Government delayed the budget, which had a knock-on effect on the year-end software update. This gives us data such as the personal allowance increases. The resulting squeeze on the time available for year-end impacted us all.

All of this was a real baptism of fire for Gary in his new role as national manager, but life wasn’t much easier for the rest of the team. People had to hit the pension increase and year-end deadlines while adjusting to working entirely on screen. What helped was that Peterborough had, under the previous structure, managed payrolls for two other offices, so they could share their experiences of working remotely. The new national team got stuck in – banding together and working through it all.

Managing Change

At this early stage of the pandemic, people were grieving the loss of normal life and grappling with very real challenges on the domestic front. Gaining key worker status for our payroll team was enormously helpful. At the end of the day, if we can’t work, pensioners won’t get paid. Key worker status made a big difference to colleagues with children at school or nursery, reassuring us that we’d be able to work uninterrupted.

Throughout this extraordinary period, the payroll team has managed this change without missing a single deadline or delaying a single payment to 37,235 pensioners who depend on us for their retirement income.

We all adapt to change in different ways, and people did worry about sitting on their own with no team around them. From working side by side in office-based teams, they were suddenly working alone in a remote location as part of a national structure. And not everyone knew all their new colleagues.

We set up a group chat on Microsoft Teams for the entire payroll team, where anyone could raise questions or discuss issues. People quickly got used to video calls and liked being able to see who they were speaking too. They began to feel less stressed and isolated.

Throughout this extraordinary period, the payroll team has managed this change without missing a single deadline or delaying a single payment to 37,235 pensioners who depend on us for their retirement income. Working under that pressure every month at home on your own is not easy. But as a team, we all met the challenges we faced.

Everyone stepped up brilliantly

If we’d all been in the office, the change would have been much slower. People would have struggled to get out of the habit of paper files and print-outs. But the pandemic has accelerated a lot of business processes, and payroll is no exception. It’s turned out well.

People got to know each other, and light-hearted chat began to appear amid the work-related queries. Everyone stepped up brilliantly. So in a lot of ways, lockdown made it easier to form one big team. Without it, we would have taken longer to gel and break old habits.

We’ve been really impressed with the team and the hard work and team spirit they all demonstrate on a daily basis. They’ve done an amazing job over the past year.

We truly believe that home-working has benefited us all. It’s made everyone feel like one team. It’s been great to see everyone getting to know each other and working together.

Payroll is pressurised work and lockdown isn’t easy for anyone. Since March 2020, the team has taken on 13 new payrolls. Across our 175 payrolls, we pay almost £24m gross each month to 37,235 pensioners, including 1,208 who live overseas.

With other areas of work, if you miss a deadline by a day or two, it’s not the end of the world. But with payroll, if you don’t get the work done, checked and transmitted on time, people will be paid late and may have to go without.

We’ve been really impressed with the team and the hard work and team spirit they all demonstrate on a daily basis. They’ve done an amazing job over the past year.