Auto- enrolment The facts made simple

1. Auto-enrolment The facts made simple Are you in … control?

2. Agenda • • About Carey Pensions UK • Auto-enrolment – The facts, the opportunity, your options • • Auto-enrolment – Compliance solution • • Auto-enrolment – Qualifying Workplace Pension • • Summary • • Q&A’s

3. About Carey Pensions UK

4. About us •Carey Pensions UK is an independent provider of specialist pensions administration • Carey Pension Trustees UK Limited is an independent professional trustee of pension schemes • Part of a larger group that has been established for 40 years • Share holders of the group are ten partners of one of the largest international law firms in the Channel Islands, Carey Olsen • Carey Group administers over 25,000 members pensions across a range of individual and company schemes • Carey Group administers in excess of £1 billion pension assets and over $18billion assets across the Group • Carey Pensions UK is an award winning company for its customer service provision • Customers are at the heart of all that we do • Committed to the delivery of quality products and services

5. Why is auto-enrolment happening? • People are living longer • Retirement is under-provided for • Minority of British adults contribute to a personal pension plan • The government is compelled to take action • Auto-enrolment is introduced to the UK to encourage all to save for their retirement A successful model Auto-enrolment has been inspired by successful models in both Australia and New Zealand; Superannuation schemes and the Kiwisaver. In the USA the take up rate of workplace pensions rose from 52% to 82% with the introduction of auto-enrolment in 2009.

6. What is auto-enrolment? • • A new law by the government designed to help people save more for their retirement • • Companies are obliged to auto-enrol their employees into their scheme between October 2012 & February 2018 depending upon the number of employees in the company – “staging dates” • • There is a Qualifying Workplace Pension minimum criteria requirement that companies need to meet: • - Permit automatic enrolment • - Automatically enrol employees within three months of joining the company • - Have a default investment option • - Meet one of the minimum contribution tests • - Meet one of the minimum contribution levels • It is primarily compliance and adhering to legislation

7. The basics and who qualifies An employee must be automatically enrolled if they meet the following criteria: • are not already active members in a Qualifying Workplace Pension • are at least 22 years old • are under the state pension age • earn more than £10,000 annually (this figure will be subject to change) • work or regularly work in the UK After being enrolled an employee will have the option to opt out, but can choose to opt back in after 12 months. Employers are legally required to re-enrol any employees who have chosen to opt out, and have not yet opted back in, every three years from the date of original enrolment.

8. Assessing Workers Eligible Jobholders – Must be auto enrolled with employer contributions Aged between 22 and SPA, earn above £10,000 Non Eligible Jobholders - Have the right to opt in with employer contributions Aged between 16-21 or SPA-74, earn above £10,000 Or Aged 16-74, earning above £5,772 but below £10,000 Entitled Workers – Have the right to join but the employer doesn’t need to contribute Aged16-74, earn below £5,772

9. Minimum contribution tests for Money Purchase, Stakeholder and Group Personal Pension (GPP) schemes paid by company

10. Minimum contribution levels Contributions in Australia are now 12.5% employer and 12.5% employee

11. Risks of non-compliance It is important that employers understand the risks to them with whatever Qualifying Workplace Pension and/or auto-enrolment solution they choose. If the company is found non-compliant there is a risk of FINES. The fines are related to the number of staff in the company. Fines will be levied where companies: • Fail to register with the regulator • Offer their employees incentives to opt-out of joining the pension scheme • Fail to meet their monthly contributions

12. Staging dates

13. Auto-enrolment opportunity In 2014 in the UK 38,000 employers (36,000 in the first 6 months of this year) 4.9 million employees

14. Alternative Options NEST, NOW, People’s Pension Payroll Companies Competitive pricing SAGE Aimed at low to moderate earners Iris Limited investment choice Ceridian Don’t all have an end to end solution ADP Simple application process Morepay NEST must accept all applications Insurance Companies Competitive pricing Familiar brand End to end solution ‘Cherry pick’ cases or strict acceptance criteria Bundled solution

15. Workplace Pension Auto-enrolment System Regulator compliant Bespoke portal Compliance HR/Payroll interfaces Workforce assessment Member communication Record keeping

16. The Carey Auto-enrolment System – making it simple Overview

17. Auto-enrolment Our specialist auto-enrolment portal team will demonstrate the system functionality •Pension schemes with multiple sections • Assessment of scheme and sections • Assessment of workers • Enroleligible jobholders • Opt-in and out • Electronic correspondence • Reports/outputs Regulator Providers Management Information

18. Carey Pensions UK auto-enrolment system Key features •Reduced employer administration costs • Reduced employer administration resource • Provision of own branded auto enrolment portal • Fully functional fully compliant auto enrolment portal • Automatic upgrades to the auto enrolment portal • Full training on auto enrolment portal • Full technical manual • Access for employers • Access for employees • Technical support to employer

19. Implementation Process • Training provided via webinar • Fact find completion • URL built by Carey Pensions UK • Log ins sent to the employer and training provided via adviser or webinar

20. The Workplace Pension Making it simple Building bespoke pension solutions for corporate clients The unbundled approach The Carey Workplace Pension Trust The Carey Group SIPP Carey Pensions UK establishment responsibilities Carey Pensions UK administration responsibilities White labelling

21. The unbundled approach • ‘Best of breed’ independent partners • Industry specialists • Building bespoke solutions • Greater control • Ease of management • Pro-active monitoring and review • Working together for the future • Added value employee benefit

22. Building bespoke pension solutions for corporate clients Each companyis different Investment options can be tailored and pro actively managed

23. Implementation • Provide company IDand complete a 3 page application form • CPUK create the Deed of Participation (DoP) • Employer signs the DoP. The adviser returns this to CPUK along with adviser fee schedule • and Investment recommendation report (if outside the default) • CPUK register the scheme with HMRC and TPR, coordinate with the investment house and • HR/Payroll ready to collect 1st months contributions

24. Price for Employers with 50+ Employees AE SystemThe Workplace Pension £500 plus VAT one off set up fee £1000 plus VAT one off set up fee £1.50 plus VAT per employee per month 0.75% AUM plus £1 per member per month TOTAL: £1500 plus VAT set up, £2.50 per employee per month, 0.75% AUM How Can the Adviser Make Money? Example Adviser Charging: £3500 implementation fee = £2000 margin £3.50 per employee per month = £12 per employee margin Example: 1 Adviser Firm, 5 Consultants, 20 employers per consultant, 60 employees per employer 20 employers x £2000 = £40000 x 5 consultants = £200000 20 employers x 60 employees x £12 = £14400 x 5 consultants = £72000 TOTAL: £272000

25. Price for Employers with less than 50 Employees AE SystemThe Workplace Pension £500 plus VAT one off set up fee £500 plus VAT one off set up fee £1.50 plus VAT per employee per month 0.75% AUM plus £1 per member per month TOTAL: £1000 plus VAT set up, £2.50 per employee per month, 0.75% AUM How Can the Adviser Make Money? Example Adviser Charging: £3000 implementation fee = £2000 margin £3.50 per employee per month = £12 per employee margin Example: 1 Adviser Firm, 5 Consultants, 20 employers per consultant, 25 employees per employer 20 employers x £2000 = £40000 x 5 consultants = £200000 20 employers x 25 employees x £12 = £6000 x 5 consultants = £30000 TOTAL: £230000

26. Summary • Auto-enrolment is here – employers MUST take action! • Employers who delay are at risk of huge daily fines • From February 2014 there will be limited resource – providers will be selective, costs will rise, fines will be charged • Compliance is time consuming and an on-going responsibility • With 8%+ contributions, employees deserve to feel engaged in their retirement plans • Employers should have flexibility and control • One size does not fit all • We’re here to help • Don’t delay!!