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Automatic enrolment webinar for business advisers

Join us for a webinar on automatic enrolment where we will discuss the basics and offer guidance on how to help your clients with their workplace pension duties. Don't miss the opportunity to ask questions!

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Automatic enrolment webinar for business advisers

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  1. Neil EsslemontHead of Industry liaison teamRebecca WoodleyIndustry liaison manager 9 March 2015 Automatic enrolment webinar for business advisers The information we provide is for guidance only and should not be taken as a definitive interpretation of the law.

  2. Welcome Today we will be looking at: which advisers employers are turning to for help the basics of automatic enrolment and what tasks you might help your clients with. There will then be the opportunity to ask questions. We won’t assume you already have prior knowledge.

  3. What is automatic enrolment? The law on workplace pensions has changed. Every employer, with at least one member of staff, has new duties, including putting those who meet certain criteria into a workplace pension scheme and contributing towards it. This is called automatic enrolment. It’s called this because it’s automatic for staff – they don’t have to do anything to be enrolled into a pension scheme. It’s not automatic for employers. They need to take steps to make sure staff are enrolled.

  4. Research - who will employers turn to? Micro (1-5 staff) Small (6-49 staff) 65% 81% Have already (25%) or plan to consult (40%) Have already (51%) or plan to consult (30%) Source: Employer tracker Source: Employer tracker

  5. Create a plan and work out costs

  6. Staging date • The employer duties apply to each employer fromtheir staging date: • the duties apply toallof the employer’s workers from that date. • You can look up a client's staging date by entering all the PAYE references, that were being used on 1 April 2012, into our staging date tool and their staging date will be the earliest date given by the tool.

  7. Help your clients find their staging date • Our latest research shows that around 20% of small employers and almost half of micro employers do not know the exact date they need to comply with their duties. • We are sending out letters to all employers telling them their staging date and to ask them to nominate a contact with us to get ongoing guidance and support. You may get more enquiries. • You can also nominate yourself as your client’s secondary point of contact at:www.tpr.gov.uk/nominate-contact • Find out your clients staging date here: www.tpr.gov.uk/employers/tools/staging-date.aspx

  8. DC scheme minimum contributions Phase 1 *% of qualifying earnings Minimum DC 2% total contribution* Large employers Medium employers Newemployers Small/micro employers Minimum DC 1% employer contribution* Feb 2018 Oct 2017 May 2017 June 2015 April 2014 Oct 2012

  9. DC scheme minimum contributions Phase 1 Phase 2 Min DC 5% total* *% of qualifying earnings Minimum DC 2% total contribution* Min DC 2% employer* Large employers Medium employers Newemployers Small/micro employers Minimum DC 1% employer contribution* Feb 2018 Oct 2017 May 2017 June 2015 April 2014 Oct 2012 Oct 2018

  10. DC scheme minimum contributions Phase 3 Phase 1 Phase 2 Min DC 8% total* Min DC 5% total* *% of qualifying earnings Min DC 3% employer* Minimum DC 2% total contribution* Min DC 2% employer* Large employers Medium employers Newemployers Small/micro employers Minimum DC 1% employer contribution* Feb 2018 Oct 2017 May 2017 June 2015 April 2014 Oct 2012 Oct 2018

  11. Who are your client’s ‘workers’? • Staff will be considered a ‘worker’ and subject to the automatic enrolment legislation* if they are: • aged 16 to 74 (inclusive) and work or ordinarily work in the UK, • and: • either work under a contract of employment (an employee) • orare not an employee – and these 3 conditions are met: • they are contracted to carry out the work themselves and cannot freely subcontract the work or send a substitute; and • they are not a director of the company they are working for; and • are not undertaking the work as part of their own business. • However, if your client is paying another company for work being carried out by a worker, rather than paying that worker themselves, then the other company would be considered the employer of that worker for automatic enrolment purposes. • * There are some exemptions, which we will explain later – or see our website for full details

  12. Is a director a worker? • A director of a company is not classed as a worker, unless: • the individual works for the company under a contract of employment • and • there is at least one other person working for the company under a contract of employment • A director who is not working under an employment contract is never classed as a worker • The exemptions can apply to more than one director working for the same company

  13. Companies with no duties • If a company has noworkers on its staging date, then it has no duties under automatic enrolment and would not need to set up a pension scheme or complete a declaration of compliance.   • If the company has received a letter from us and they have no workers on their staging date, we ask that they inform our help desk by emailing: customersupport@autoenrol.tpr.gov.uk with their PAYE ref. • For more details about automatic enrolment exceptions, visit our website.

  14. Assessment of workers Figures for 2015-2016 (subject to parliamentary approval)

  15. Postponement Employers can delay the assessment of all or any of their workers from 1 day to a maximum of 3 months: at their staging date, and then when a new worker joins, or when a worker becomes eligible to be automatically enrolled. They need to send a letter explaining this to their workers within six weeks of the start of postponement (eg staging or joining date). Some workers can ask to opt-in, even during postponement.

  16. Choose your software and check records Payroll software can help a client carry out: the assessment enrolment communications, and calculation of pension contributions If their payroll software does not do all of the above, non-payroll software or services could be used. Some pension scheme providers offersome or all of these services. Clients should plan to test these systems before they go live.

  17. Choosing a pension scheme If an employer has an existing scheme they will need to check with the provider if it is suitable for automatic enrolment, as many will not be. There are a number of pension providers which will accept small employers. Information for employers can be found at: www.tpr.gov.uk/employers/finding-a-provider.aspx National Employment Savings Trust (NEST) is a pension scheme set up by the government that all employers can use to meet their duties. You can also get further details on our website at: www.tpr.gov.uk/professionals/pension-schemes.aspx

  18. ‘Opting-out’ Workers have to be automatically enrolled before they can ‘opt out’. Workers must be told how to opt out (eg in their enrolment letter). The employer must notgive or send them opt-out forms, this must be done by the pension provider. A one calendar month opt-out window starts when bothof the following have happened: the worker is enrolled into the pension scheme, and when the the worker has been given an enrolment letter or email. The worker will get a full refund of all contributions.

  19. Communicating to workers and keeping records • At staging, employers will need to communicate directly to all their workers. • Employers will also have to write to their workers to inform them if they are being automatically enrolled. • The deadline for communications is usually six weeks. • We have ‘template’ letters employers can customise and use. • Employers must keep records about their workers and the pension scheme used to comply with the employer duties (pension providers and trustees will also have duties to keep records). • Records must be kept for up to six years. • Note. The communication requirements are changing soon. Look out for new templates on our website.

  20. Re-enrolment The re-enrolment date is roughly every three years from the employer’s staging date. On the re-enrolment dateany worker who: is not an active member of a qualifying scheme, and has opted out or ceased membership more than 12 months ago... will need to be re-assessed and, if eligible, automatically enrolled.

  21. Declaration of compliance Employers must complete a declaration of compliance within five months of their staging date. All postponements applied at the staging date must have come to an end before the declaration can be completed. Employers may receive a penalty fine if they do not complete their declaration on time. Employers will need to provide certain details, for example: which pension schemes were used to comply with the duties, and the number of eligible jobholders automatically enrolled into each scheme. You can start the online process early and partially complete your declaration. www.tpr.gov.uk/docs/automatic-enrolment-online-registration-checklist.pdf

  22. What service will you offer your clients? Your clients may assume you will provide an end to end service. What services are you going to offer your clients? Will they include: confirming the staging date creating a plan and working out costs pension scheme selection/on-boarding assessment of the workforce sending enrolment and contribution data to the provider payment of contributions managing opt-ins/opt-outs and refunds of contributions member communications (eg issuing statutory letters/emails) maintaining records assisting with or completing the declaration of compliance?

  23. Any questions?

  24. We are here to help! Subscribe to our news by email:www.tpr.gov.uk/subscribe.aspx Contact us at:www.tpr.gov.uk/contact-us.aspx Connect with us on LinkedIn:www.linkedin.com/groups?gid=2675456 Follow us on Twitter:https://twitter.com/TPRgovuk Thank you The information we provide is for guidance only and should not be taken as a definitive interpretation of the law.

  25. We would really appreciate your feedback on this webinar. Feedback

  26. Additional slides

  27. Useful links Staging date tool:www.tpr.gov.uk/employers/tools/staging-date.aspx Planning tool:www.tpr.gov.uk/planner The essential guide to automatic enrolment:www.tpr.gov.uk/employers/e-brochure/index.html Ourdetailed guides for employers and business advisers:www.tpr.gov.uk/pensions-reform/detailed-guidance.aspx Information about declaration of compliance:www.tpr.gov.uk/declaration Lettertemplates for employers:www.tpr.gov.uk/employers/letter-templates-for-employers.aspx

  28. Who is a ‘personal services worker’? • Whether someone is self employed or not, an individual (who is not a director) with a contract to perform work or services personally,may be a worker. • The employer needs to judge whether or not they are undertaking the work as part of the individual’s own business. So, does the employer: • have control over an individual’s method of work (eg hours worked)? • provide any employee benefits? • bear all the significant financial risks in carrying out the work (eg the worker is not financially responsible for their faulty work)? • provide what is required for the individual to carry out the work (eg tools)? •  If most or all of the above are true, then it would be reasonable to consider that they are not undertaking the work as part of their own business – and therefore they are a personal services worker. • The list above is not exhaustive and an employer must take into account all relevant considerations and make a reasonable judgement.

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