Issue 1 2013

Oval Charities

Auto Enrolment – the time to act is now Page 1&2

Newsflashes about major changes to the Civil Justice System and Class Action proposals Page 2

Claims Management Advice Page 3

Flood Risk Tips and Management Page 3

Health & Safety Updates Page 4

In this IssueAuto Enrolment – the time to act is now

Our first newsletter for 2013 follows on from an uninspiring budget with much less impact on the sector than April 2012. Whilst the UK and Eurozone struggle on, the International Aid budget has been protected and work is underway to make it easier for not-for-profit organisations to participate in central and local Government/public sector tenders. However, the jury still remains out on this and it is fair to say that the words ‘Big Society’ have passed into the history books.

This edition of our Charity Newsletter features:

• Some advice on Auto Enrolment from our Oval Financial Services colleagues

• Newsflashes about changes to the Civil Justice System and information on government Class Action proposals

• Advice on claims management to help you to minimise the impact on future insurance premiums

• Some tips and commentary on flood risk an d risk management

• Our usual Health & Safety update

Welcome to the Oval Charities Newsletter Issue 1 2013

Oval Financial Services can help and uses a straight forward approach to review the impact of Auto Enrolment in various scenarios. The best solution to achieve compliance will vary from organisation to organisation, and it will not just be a one time review at payroll or even only an annual check.

In fact, Auto Enrolment compliance is something that must be done at each payroll run, whether monthly or weekly, once you become affected by the new regulation.

Just when your organisation will be required to comply/the staging date, will depend on your organisation’s PAYE scheme size or reference as set out in the table below. As you can see any such scheme with 6,000 members or more should already be compliant with the rest of 2013 seeing the member number going down to just 500 or more employees.

As from October 2012 there are new regulations for pensions in the UK. Over time they will affect all not for profit organisations other than single person organisations. This means that employers will be required to automatically enrol their eligible employees into a qualifying workplace pension scheme and make compulsory contributions towards it.

Employers with less than this will be enrolled by PAYE reference from April 2015 - February 2018

There are three routes to compliance:

1. Use a pension provider’s solution – free of charge.

2. Purchase a system. There are a number available to you.

3. Talk to your Payroll Supplier as they may have developed an integrated system for use.

Below is an example of how an Auto Enrolment modeller will work.

PAYE scheme size or reference Staging Date PAYE scheme size or reference Staging Date

120,000 or more 1 October 2012 500-799 1 November 2013

50,000-119,999 1 November 2012 350-499 1 January 2014

30,000-49,999 1 January 2013 250-349 1 February 2014

20,000-29,999 1 February 2013 160-249 1 April 2014

10,000-19,999 1 March 2013 90-159 1 May 2014

6,000-9,999 1 April 2013 62-89 1 July 2014

4,100-5,999 1 May 2013 61 1 August 2014

4,000-4,099 1 June 2013 60 1 October 2014

3,000-3,999 1 July 2013 59 1 November 2014

2,000-2,999 1 August 2013 58 1 January 2015

1,250-1,999 1 September 2013 54-57 1 March 2015

800-1,249 1 October 2013 50-53 1 April 2015

Employer Providers

Payment and Data

Payment and Data

Payment and Data

PENSION

PENSION

NEST

PAYROLL

AUTO ENROLMENT TOOL

standalone or providers

Continued overleaf...

Issue 1 2013

Oval Charities

Newsflashes

Major Changes to the Civil Justice SystemThere are major changes that will affect the Civil Justice System from April 2013 onwards. There is still some detail to be finalised but what we do know now is that these changes will have a very real impact on organisations.

The reforms represent the largest overhaul to the personal injury legal framework in England and Wales in over twenty years and are intended to bring more balance to the civil litigation system by:

• Making lawyers costs more proportionate

• Combating the compensation culture

• The ending of After The Event insurance

• Creating an environment where insurers can pass on savings to clients through lower premiums

What will happen?To minimise cost, new time frames will be put in place. For example, currently, defendants have 90 days to acknowledge and then decide on liability. However, this will be radically reduced. Although yet to be confirmed and implementation delayed currently to August 2013, an insurers decision is anticipated to be needed within 30 or 40 days. Meaning Day One action is vital.

What does it mean to you?The speed of a response to any letter of claim is even more crucial. The new time frames in place will place more pressure on defendants to pass claims onto their insurers with immediate effect, to ensure that they comply with the new rules such as acknowledgement within one working day (currently three weeks). Organisations with many departments and/or diverse locations will need to ensure that all notifiable incidents are reported promptly and in sufficient detail to a central point for transmission onto the relevant/your usual claims contact.

The key focus will be on helping insurers to reach the right decision early in terms of liability and value. Now is the time to work more closely on your internal insurance and risk management processes and programmes. Making sure all the relevant information is transmitted in a timely fashion will be fundamental.

Getting ready for Auto EnrolmentIf your organisation has between 500 and 6,000 employees now is the time to get ready for Auto Enrolment. By October 2018 the employer’s chosen qualifying pension scheme must provide total payments of at least 8% of qualifying earnings, with the employer paying at least 3%.

Who is an eligible employee?1. An employee aged between 22 and the

state pension age2. An employee earning more than the

income tax allowance 3. An employee who is not a member of a

qualifying pension scheme4. Any other employee that chooses to opt-in5. An employee ordinarily working in the UK

When must my employees be automatically enrolled?1. Within three months of becoming eligible,

though they can opt-in before this date2. Once every three years employers must

re-enrol all employees that have opted-out as a check to see if this stance is to be continued by the employee

What does Auto Enrolment mean for me?1. You must provide employees with

information regarding the qualifying pension scheme

2. The minimum contributions become immediately payable on the qualifying earnings

3. Contributions should be made by both you and the employee

4. Your employee(s) have one month during which they can select to opt-out

Qualifying SchemesA qualifying workplace pension scheme is either an employer sponsored pension arrangements that satisfies specified quality tests or the National Employment Savings Trust (NEST). NEST is a low cost pension scheme that any employer can use as a workplace pension.

Oval Financial Services can provide you with additional information and guidance on this subject and help you to understand and plan for these major changes. Please contact Nick Allen, Head of Workplace Benefits at Oval Financial Services on 07584 171067 or drop him an email at nick.allen@theovalgroup.com

Auto Enrolment – continued...

UK Government’s Class Action Proposal

The UK Government is considering a new regime for ‘class actions’ in cases alleging anti-competitive practices and has raised concern from business and not for profit organisations that Britain could become a centre of litigation abuse. Lawyers have welcomed the proposal arguing that it will enhance consumer access to justice.

The obvious fear is that the UK becomes more like the US where similar rules apply already. The fear is based on the sheer number of cases brought in the US. The UK had 41 anti-trust cases that resulted in a judgement between 2005 and 2008, whereas the US had 677 cases in 2012 alone.

Whilst this may seem a remote position for the majority of charities those with trading arms should watch this space, and the real fear is that this will be ‘letting the legislation genie out of the bottle’ as per the Confederation of Business Industry (CBI) who fear that such an act will threaten the UK’s fragile economy. In the longer term, my own fear is that once one piece of legislation is in place the number of areas where ‘class actions’ are permitted could be widened.

Issue 1 2013

Oval Charities

Flood Risk Tips and Management

More and more properties have become prone to flooding in recent years as the climate changes and the UK seems to be left at high risk. Did you know that the average annual flood damage across the UK sits at around £1.1 billion and this is predicted to rise to an even more frightening £27 billion a year by 2080.1

Types of Flooding

• Coastal flooding: extreme weather combined with high tides force seawater through coastal defences to flood the hinterland

• Flash flooding: caused by sudden overwhelming heavy rain, failed flood defences or insufficient drainage – or all three

• Groundwater flooding: a sustained rise in the water table, usually caused by prolonged rain. This can remain for several weeks or even months

• Surface water flooding: caused by heavy and direct rainfall failing todrain away from contact with the land

• Sewerage flooding: caused where drainage systems lack the capacity to handle heavy rain and flooding – or simply fail

What can you do to protect your organisation?

Whilst flood risk is clearly increasing it is still unpredictable so you need to consider carefully what and how much you want to invest to increase your own protection. This will undoubtedly vary and depend on:

• Whether you own or lease the property(ies) you occupy

• Whether it is key to your organisation’s income streams or secondary

• Whether the building itself has a symbolic meaning for your organisation

• What is within the building

Below are some physical actions that you might consider depending on your individual circumstances:

• Make sure that important contents (including IT equipment) are raised above known water levels. The saddest claim I was ever involved in was with a small charity based in London that lost their library of antiquarian books which had been stored in the basement

• If your property is in a high risk area check the Governmental websites (Environment Agency and Scottish Protection Agency) for flood warnings. You can also sign up for the floodline support service, Floodline Warnings Direct which will alert you if you are in imminent risk of flooding. Their number is 0845 988 1188 for further details

• Consider purchasing ready-prepared sandbags provided you have room to store them

• Keep drains and gutters free of debris and other blockages through regular maintenance or lobby your landlord to ensure that they do this

• Keep the roof or any terrace areas free of vegetation that could damage the roof or let in rain or snowmelt. Again if you don’t own the property make sure that your landlord is taking these steps as it would be in their interest as much as yours but may have been overlooked

• Consider commissioning a Flood Assessment Survey if your building is of special importance to your organisation

• If your properties are in high risk areas, check public records for the area, as well the history of your properties

• Check the plumbing of electrical appliances such as dishwashers and vending machines that use a water supply and position these away from important contents

And if you have vacant properties that you own, you need to take special care to adhere to insurer’s requirements, which will include draining the water system and regular internal inspections to spot

leaks.1 Flood Defence, Parliamentary Notes, www.parliament.gov.uk, 2012

When a claim occurs a process needs to swing into action that deals with the claim in hand and considers the future impact of losses on your insurance premiums. What you need is:

• A helping hand to guide you through the claim

• Support to get you back up and running quickly

• Accurate recording of the loss to provide high quality claims management information to aid the reduction of costs and the identification of risk management opportunities

• Access to expertise to prevent reoccurrence

• Using the historical claims information to prevent future claims

A key part of a broker’s role is to identify claims trends and patterns early so that you can take action and demonstrate this to insurers at renewal when they are setting the future insurance premium. This identification is then tackled through risk management interventions and ensuring that your risk management procedures are efficiently geared to prevent the loss recurring.

Through proactive claims management and regular claims monitoring, claims can be dealt with efficiently and the settlement amounts validated. There are four levels designed for claims optimisation:

• Refresh the claims experience. Checking that insurers are working on up to date claims and accurate information when they reserve a claim to your account. At Oval Charities we routinely audit client’s claims experience, keeping it clean, fresh and accurate

• Challenge estimated values. It is hard to challenge an actuarial table – but not impossible. We use our data analysis and experience to challenge amounts that appear unreasonable to us and negotiate hard on behalf of our clients

• Claims analysis. Through identifying claims trends we can alert clients to problem areas where a change in process could mitigate future risk exposures

• Positive risk management intervention. Oval Charities incorporates risk management experts with claims managers so where we identify a claim is likely to recur we can recommend that you take action and suggest ways to improve your risk management processes.

Claims Management Advice

Issue 1 2013

Oval Charities

Health & Safety UpdatesFire Risk Assessment advice and guidance

Back in 2010 Aviva Risk Management Solutions issued a warning that 40% of businesses¹ are failing to conduct fire risk assessments in accordance with legislation.

Based on this unsatisfactory level of compliance with the Regulatory Reform (Fire Safety) Order 2005 (The Order), Fire and Rescue Services have issued businesses with 34,500 informal notifications, 3,200 enforcement notices, 442 prohibition notices and 84 alterations notices.1

And fire authorities prosecuted 43%² more organisations last year for failing to comply with any part of the order. Probably the largest fine inflicted to date was on a London branch of the high street fashion chain, New Look at £400,000, but since then many more have followed at a lower but costly level.

The Order completely changed the way that the responsibility for fire safety in the workplace was viewed shifting the responsibility from the local Fire and Rescue Services onto the owner/occupier of the premises. This means that you need to undertake a risk assessment to ensure that fire precautions are in place that are appropriate to the premises and the work undertaken within them.

About Us

The Oval group is a leading UK risk, insurance broking, healthcare and financial services advisory group.

With offices across the UK, Oval Insurance Broking (Oval) is the specialist insurance and risk management partner of choice for thousands of organisations and individuals across a range of disciplines and industry sectors.

From general insurance to sector-specific requirements, the strength of Oval lies in designing bespoke, dynamic and keenly competitive risk solutions that fit your needs exactly. Our skilled specialists take the time to understand those needs, simplifying risk to deliver a consistently innovative, high standard and high performance service that adds value, capability, agility and competitive edge to your business.

For more information to help you explore the personal impact of this issues’s topics please contact:

Alyson PepperillAlyson.Pepperill@theovalgroup.com

Mob: 07824 492665

Oval Insurance Broking Limited

Registered Office: 9 South Parade,

Wakefield WF1 1LR

Registered in England No: 01195184

Authorised and regulated by the

Financial Services Authority.

Oval Financial Services Limited

Registered Office: 9 South Parade,

Wakefield WF1 1LR

Registered in England No: 02192234

Authorised and regulated by the

Financial Conduct Authority.

www.theovalgroup.com

Changes to Energy Performance CertificatesFrom the 9th January 2013, it is a requirement of all non–dwellings over 500m2 frequently visited by the public to display a valid Energy Performance Certificate (EPC) in a prominent place clearly visible to members of the public.

This applies to all buildings that already have an EPC, as well as to all buildings sold, constructed or rented out after this date.

However, please note that in addition to the usual exemptions, buildings and monuments officially protected as part of a designated environment because of their special architectural or historic merit that would be unacceptably altered by energy efficiency compliance would not require an EPC.

General Fire Precautions

Fire risk assessments will help you identify risks and decide on general precautions. Some examples of these are:

• Providing employees and volunteers with appropriate training on fire prevention and detection

• Ensuring that your employees and volunteers know what to do if a fire starts and what to do with any visitors or service users on the premises

• Identifying whether anything that is done in the building adds to the likelihood of a fire occurring or spreading, such as disposal of rubbish generated by a retail shop or storage of flammable items

• Deciding what type of fire extinguishers to deploy, how many you need and where they should be sited

• Confirming that existing means of detecting a fire and raising the alarm are adequate• Ensuring that fire fighting equipment and/or alarm systems are properly serviced

and maintained• Inspecting the premises regularly to check fire extinguishers, alarms and exits are still working

and not obstructed• Keeping records of all fire drills, alarm tests and extinguisher maintenance work• And finally, if you share the premises discuss your fire risk assessment with the other occupants,

to ensure that fire precautions/procedures take into account risks relevant to all occupants

Once you’ve put the fire precautions in place your employees and volunteers have a duty to comply with the rules that you establish and not to put themselves in danger from fire.

And bear in mind that if you have more than 5 employees or volunteers that could be construed as employees, then you must record the significant findings of the fire risk assessment but this is good practice in any case.

For further guidance please see https://www.gov.uk/workplace-fire-safety-your-responsibilities/fire-safety-advice-documents.

¹ www.communities.gov.uk/documents/statistics/pdf/1386547.pdf (PDF 562KB)² Fire and rescue service statistics show 60 prosecutions in 2008/2009 against 42 in 2007/2008.³ http://news.bbc.co.uk/1/hi/England/London/8379503.stm