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Automatic enrolment

Automatic enrolment. Supporting you every step of the way. Presented by Simon Taylor | Pearson Hinchliffe Pensions Specialist. Contents. Background to reform Employer action plan: What they need to do? When they need to do it? Who must they do it for? How will they do it?

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Automatic enrolment

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  1. Automatic enrolment Supporting youevery step of the way Presented by Simon Taylor | Pearson Hinchliffe Pensions Specialist

  2. Contents • Background to reform • Employer action plan: • What they need to do? • When they need to do it? • Who must they do it for? • How will they do it? • Choosing a pension scheme Do I need to do it? How much will it cost? Any way out?

  3. The Employer Duties For professional advisers only

  4. Automatic enrolment & the new employer duties The Pensions Act 2008 Section 3(2) “The employer must make prescribed arrangements by which the jobholder becomes an active member of an automatic enrolment scheme...” Source: Pensions Act 2008, Office Of Public Sector Information – www.opsi.gov.uk.

  5. TPR 7-step checklist 1. Know your staging date – when to act 2. Assess your workforce 3. Review your pension arrangements 4. Communicate the changes to all your workers 5. Automatically enrol your ‘eligible jobholders’ 6. Register with the Pensions Regulator and keep records 7. Contribute to your workers’ pensions

  6. The rules

  7. How much do I have to pay? • Defined Contribution – will be phased in to:8% ‘Qualifying Earnings’ total 3% ‘Qualifying Earnings’ employer minimumJobholder can be required to make up the difference • ‘Qualifying Earnings’ • Between £5,564 - £42,475* • Includes overtime, SSP, SMP etc * Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2012

  8. Admin duties Sources: Pensions Act 2008, The Occupational and Personal Pension Schemes (Automatic Enrolment) Regulations 2010.

  9. Or else... Stage 1 - Warning Compliance/unpaid contribution notice Stage 2 – ‘Wake up call’ Fixed penalty - £400 Escalating penalty Workers Penalty per day 1-4 £50 5-49 £500 50-249 £2,500 250-499 £5,000 500+ £10,000 Stage 3 – Persistent offenders Sources: Pensions Act 2008, Chapter 2, The Occupational and Personal Pension Schemes (Automatic Enrolment) Regulations 2010. For professional advisers only

  10. Doing nothing is not an option... The Pensions Act 2008, Section 45(2) • “A person guilty of an offence under this section is liable - • on conviction on indictment, to imprisonment for a term not exceeding two years, or to a fine, or both; • on summary conviction to a fine not exceeding the statutory maximum.” Source: Pensions Act 2008, Office Of Public Sector Information – www.opsi.gov.uk.

  11. Automatic Enrolment Schemes • Employer choice: Automatic Enrolment Scheme Private Scheme NOW: Pensions1 The People’s Pension2 1NOW:Pensions, marketed by ATP 2The People’s Pension , marketed by B&CE

  12. About NEST What people think: What it is: • Government run • Cheaper than a private scheme • One size fits all • Maximum contribution £4,4001 • Limited investment choice • No transfers in or out • No trustee discretion on death • 0.3% amc plus 1.8% contribution charge 1 2012/13 terms

  13. Building on NEST Employer Less admin Added extras Staff appreciation Competitive edge HR systems Benefits systems Auto-enrolment system Adviser Adviser Investment advice Scheme design Auto-enrolment Certification Ongoing reviews Provider Provider Investment options Technical support Implementation support Benefits admin. platform Member communications

  14. Summary Step 1 – Design a solution Step 2 – Implement the changes effectively Step 3 – Run the scheme in the most efficient way

  15. Thank YouAny Questions?Contact Me:Simon Taylor0161 785 3508simon.taylor@phsolicitors.co.uk

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