ETHIKA AUTO ENROLMENT PENSION SCHEME

SIMPLE, RESPONSIBLE, PROFITABLE

The Ethika Auto Enrolment Pension Scheme is registered with HMRC as an occupational pension scheme PSTR 00807504RK and regulated by the Pensions Regulator ref 12009065

CONTENTS

GOVERNMENT NEW PENSION REGULATIONS 4

THE KEY CHALLENGES FOR EMPLOYERS 7

WHAT ARE THE OPTIONS? 8

OUR SOLUTION 10

WHO IS INVOLVED? 12

GENERAL ENQUIRIES: Email: info@ethikapension.com

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ALL BUSINESSES IN THE UK WILL HAVE TO ENROL THEIR STAFF BY APRIL 2017.

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The Pensions Regulator is advising employers to begin this process early to allow ample time for set up. The idea of Auto Enrolment is simple, however the implementation can be troublesome without allowing the necessary time to complete this.

BROADLY SPEAKING, EMPLOYERS MUST:• Provide a suitable and compliant workplace

pension scheme

• Assess workforce to ensure all eligible employees are enrolled in the scheme

• Make contributions in line with the statutory minimum• Communicate with employees

Ethika Auto Enrolment carried out extensive research with business owners and Company Directors when developing our proposition and identified the following 3 top priorities for businesses of all sizes:

1. Keeping any fees for setup and ongoing administration of their scheme to a minimum

2. Ensuring no significant ongoing demand on their company time

3. Providing a quality pension scheme for their employees

To that end we have endeavoured to make the process of applying for Ethika Auto Enrolment as simple and affordable as possible. We have designed our service to ensure you can provide your employees with a high quality pension scheme without the considerable burden on your time and resources.

Our unique approach makes it possible to become compliant in less than 5 minutes, freeing you up to focus on your core business activities.

The Ethika Auto Enrolment Pension Scheme is an occupational pension scheme where multiple employers can join. The scheme is a money purchase defined contribution scheme

This means that the money you and the employee pay into the Scheme is invested with the aim of giving the employee an amount of money when they retire. Their pension is based on the amount of money paid in and on how the investments have performed. Multi-employer schemes work the same way as workplace schemes, however, they are run by an outside organisation, rather than a single employer.

Joining an established multi-employer scheme is beneficial in a number of ways.

• Ongoing management and oversight of investments by qualified experts

• Reduced operational costs, which means, lower fees for a high quality service

• Fewer decisions to make, less risk for mistakes and fines

• Employees have the option to exit the fund from 55 years of age

• Independent Trustees

• Third Party Administrators

THE GOVERNMENT HAS IMPLEMENTED NEW REGULATIONS AROUND WORKPLACE PENSIONS ENSURING THOSE BUSINESSES WITH ELIGIBLE EMPLOYEES ARE AUTOMATICALLY ENROLLED AND CONTRIBUTING TOWARDS A PENSION.

ALL BUSINESSES IN THE UK WILL HAVE TO ENROL THEIR STAFF BY APRIL 2017.

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RESEARCH SHOWS THAT OVER 65% OF EMPLOYEES VALUE PENSIONS ABOVE ALL OTHER COMPANY BENEFITS. OFFERING A HIGH QUALITY PENSION SCHEME SIGNIFIES AN EMPLOYER IS PREPARED TO MAKE LONG-TERM INVESTMENTS IN STAFF AND HAS BEEN SHOWN TO HELP COMPANIES RECRUIT AND RETAIN QUALITY EMPLOYEES.

EMPLOYERS IN THE UK ARE CURRENTLY TRYING TO UNRAVEL AUTO ENROLMENT. WITH 32 DUTIES AND A 72 POINT CHECKLIST TO GUARANTEE COMPLIANCE, IT’S JUST TOO EASY FOR COMPANIES TO MAKE AN ERROR AND RISK NON-COMPLIANCE FINES.

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UNDERSTANDING THE OPTIONSPensions can be complex. This makes it difficult for employers to evaluate their Auto Enrolment options. Business owners are often limited by a lack of experience and may not have the knowledge they need to choose well.

SELECTING A SCHEMEThere are many different options to consider when choosing a supplier. Due to the volume and complexity of the available solutions, the research required to select a scheme is a major drain on time and resources.

IMPLEMENTATIONAccording to a study conducted by the Centre for Economic and Business Research, the one-off time burden of the auto enrolment procedures can be up to 103 man days plus a further 3.5 man days a month to keep up to date. This places an incredible burden on business owners, particularly SMEs, who lack the resources to employ additional in-house support. The complex nature of the auto enrolment process coupled with the significant amount of time and resources it requires leads many businesses to become vulnerable to severe penalties.

MANAGING STAKEHOLDERSThere are likely to be a number of different stakeholders involved in auto enrolment implementation. They include: HR, payroll, finance, internal communications, pension providers, consultants and employees. Employers must appoint an individual to manage the communications between these different stakeholders and ensure that all required activities are completed.

There are risks associated with handling employee communication in-house. Strict guidelines around employee communications and the short time scales allowed for responses make the process difficult, as well as opening the door to accusations of coercion.

NON-COMPLIANCEThe consequences of non-compliance are significant. The pension regulator issues an automatic fine of £400 the day after a missed staging date and a further £500 for each subsequent day after that date. Non-compliance is being rigorously monitored. If it becomes evident that an employer does not intend to comply with Auto Enrolment legislation, the Regulator can issue penalties ranging from uncapped daily fines, to criminal proceedings against individuals. There are also cases where the Regulator can force employers to put their employees in the positions they would have been in, had the employer been immediately compliant with the auto enrolment obligations.

COSTThe purchase of auto enrolment compliant software is costly, starting at around £750 as a one off fee and it is often accompanied by a monthly service charge. This cost coupled with the real logistical challenge of correctly utilising the software is a further burden to an employer even beyond the added cost associated with auto enrolment itself.

THE KEY CHALLENGES FOR EMPLOYERS.

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BUSINESS OWNERS ARE OFTEN LIMITED BY A LACK OF EXPERIENCE AND MAY NOT HAVE THE KNOWLEDGE THEY NEED TO CHOOSE WELL.

OUR TEAM OF UK BASED PENSION EXPERTS WILL MAKE YOUR LIFE SIMPLE, HELPING YOU EVERY STEP OF THE WAY FROM THE IMPLEMENTATION TO THE ONGOING ADMINISTRATION OF YOUR SCHEME.

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DIY SCHEMESEmployers have the option to set up their own compliant schemes. This may seem like an attractive option because of the low initial expenditure, but there are a number of other factors to consider. The complexity of most pension schemes require the business owner to have a significant amount of pension knowledge, not only to navigate the assessment questions evaluating employee eligibility, but also the management of all the associated processes.This demands a considerable amount of time and resources that may not be foreseen from the outset.

THERE ARE SIGNIFICANT ISSUES WITH THESE SCHEMES• Requires the employer to handle all

employee communication.This can result in miscommunication on key issues and even expose the employer to future claims of coercion by employees.

• Takes a lot of time to research and compare the different available schemes. Despite spending a considerable amount of time and energy researching all of the available options, there is no guarantee of acceptance.

• Pensions are complex and often require expert knowledge to understand completely. Mistakes made in the initial set up stage will be costly to go back and fix. These mistakes could also result in heavy penalties.

• Employees may not be able to transfer in or out of the scheme. If a decision is made without sufficient understanding, high levels of employee dissatisfaction are likely.

AUTO ENROLMENT ASSISTANCEThere are a number of suppliers that provide guidance and tools to help businesses with Auto Enrolment. These range from consultants offering to assist with implementation to software packages designed to simplify the process in-house. These options can be helpful, however they are partial solutions and can be very expensive Despite the significant cost of assisted options, the employer still remains vulnerable to the risks associated with employee communication and complex decision making.

WHAT ARE THE OPTIONS?

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THE EMPLOYER STILL REMAINS VULNERABLE TO THE RISKS ASSOCIATED WITH EMPLOYEE COMMUNICATION AND COMPLEX DECISION MAKING.

OUR STATE OF THE ART SOFTWARE ENSURES THAT YOU REMAIN COMPLIANT WITH THE COMMUNICATION DEMANDS OF AUTO ENROLMENT.

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OUR SOLUTION. ETHIKA AUTO ENROLMENT PENSION SCHEME.

The Ethika Auto Enrolment Scheme has been specifically designed to meet the challenges of the auto enrolment process. The scheme’s default investment is The Ethika Fund, a carefully selected blend of Equity and Debt Investments whose profile is consistent with a sustainable, responsible and positive impact investment mandate conceived to deliver strong and secure returns. The Fund targets annual returns of 10% net of fees.

The fund’s advisors apply an uncompromising set of assessment criteria to identify these opportunities. This rigorous selection process has been conceived to seek out companies that, among other things;

• Make positive contributions toward actively promoting a healthier global future, including companies that produce renewable energy products and/or offer effective solutions for existing social and environmental problems

• Demonstrate commitment to enhancing the environmental and social good by having a direct impact in fostering development of services to underprivileged sectors of the community or advancing environmental sustainability

• Openly disclose their policies and performance on critical social and environmental criteria

• Uphold their responsibility to shareholders and investors

In order to ensure attractive financial returns, Ethika further assesses potential investments based on a careful analysis of:

Profitability: Ethika aims to provide the highest possible returns for investors in the fund and only invests in companies with high and sustainable profitability.

Management and Company Track Record: Well managed socially and environmentally responsible companies are particularly well placed to enjoy competitive advantages from cost reductions, quality

improvements, profitability enhancements and access to expanding and new growth markets.

Elements of Government Subsidies: Ethika looks to benefit from the opportunity associated with funding incentives and seeks to invest in companies in which government subsidies represent a minimum of 50% of turnover.

Viability: In order to maintain secure and stable returns, a careful analysis of the short, mid and long term viability is performed on potential investments. This is particularly important for companies within the Renewable Energy sector.

Strength of Technology (particularly related to renewables): The Fund’s investment evaluation process is complimented by the incorporation of both qualitative and quantitative analyses of environmental, social and corporate governance (ESG) criteria, performance, practices and impacts.

OTHER SCHEME FEATURES INCLUDE:• HMRC registered and regulated occupational

pension scheme

• Pensions Regulator registered

• Principle employer E3Eco Limited

• Third Party Administrators

• Earnings definition can be pre set

• Allows transfers in

• Allows transfers out if employees leave

• Statutory minimum contributions

• Independent Trustees: Barclay Cavendish Trustees

• Retirement age: 68, but can retire from 55

• Investment Managers: Altarius Asset Management Limited

• Funds available include Default fund, plus 2 other options

• Scheme charges remain within government price cap.

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BENEFITS OF ETHIKA AUTO ENROLMENT FOR BUSINESS OWNERS1. Easy Implementation. Ethika Auto Enrolment fully

automates the process from start to finish.

2. Competitive Fees. Our approach makes it possible to provide a high quality solution at an affordable cost.

3. Risk Removal. Ethika Auto Enrolment eliminates the risk of mistakes and non-compliance related penalties.

4. A High Quality, Ethical Scheme. The scheme’s default investment strategy is The Ethika Fund, a carefully selected blend of Equity and Debt Investments whose profile is consistent with a sustainable, responsible and positive impact investment mandate conceived to deliver strong and secure returns. The Fund targets annual returns of 10% net of fees.

5. Protection Against Coercion Claims. Ethika Auto Enrolment can manage all employee communications directly, providing an independent source of guidance

and advice where necessary. This mitigates potential future risk of claims that employees were coerced into either joining or opting out of the scheme.

6. No requirement for Additional Payroll Software. Ethika Auto Enrolment integrates with all existing UK payroll software packages. Our administrative team is available to assist in seamlessly integrating with your payroll department to ensure the absolute minimum resource requirement from you and your business.

7. Saves Time, Cost and Resource. Ethika Auto Enrolment removes the hours of research and implementation required with other Auto Enrolment solutions. Our process allows you to become compliant in just minutes.

8. Bespoke Service Offering. Within the framework of Auto Enrollment bespoke flexible elements can be tailored to the employer and employee needs.

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WHO IS INVOLVED?

ADMINISTRATORS

Warwick & Eaton Administrators Limited are third-party professional pension administration specialists, who deliver high quality and first class services to all of their clients. Since the business was established they have succeeded to grow in all aspects of their business.

TRUSTEES

Barclay Cavendish Trustees Limited provide Trusteeship for occupational pension schemes, using the rules set out in the Trustee Act (an Act of Parliament that contains standard sets of rules to cover most occasions). Pension trusts also have some additional regulations imposed on them by HMRC which a pension trust must comply with if a pension trust is to obtain and keep its tax approved status.

FUND MANAGERS

Altarius Asset Management was founded in 2008 in Malta to provide its clients with the sustainable solutions needed to deal with an increasingly complex corporate and investment regulatory environment. Today, Altarius provides a wide range of corporate and administrative support services, fulfilled in a highly professional manner, thus complying with all international regulatory requirements

including ongoing reporting to the relevant authorities in key jurisdictions

SECONDARY FUND MANAGERS

Westbury Private Clients is a London Based, Discretionary Wealth Management business regulated by the Financial Conduct Authority (FCA). They are value-driven investors focussing on long-term wealth preservation aiming to take full advantage of opportunities for their clients during periods of market dislocation.

FUND ADMINISTRATORS

Apex are one of the world’s largest independent fund administration companies with over $45 billion of assets under administration, 34 offices and 600 employees across the globe. APEX is located alongside its clients providing the highest levels of services and is unique in its ability to reach globally, service locally and provide cross-jurisdictional solutions and best practice.

PENSION SCHEME AUDITORS

Mercer & Hole is a modern firm with roots established in 1905 by the founding partner, William Mercer. Mercer & Hole has three offices (London, St Albans and Milton Keynes) and 18 partners who each work very closely with their clients on a day-to-day basis.They are known for being friendly and approachable and they take a

great deal of pride in providing a personal, partner-led service to their clients.

PENSION SCHEME SOLICITORS

Turner Parkinson LLP - Established in Manchester 1995, Turner Parkinson is a business law firm with market leading strength in offering commercial advice to businesses.

PENSION SCHEME ACCOUNTANTS

Bennett Verby Accountants - With over 120 years experience they offer clients the highest level of expert accountancy, tax planning and business advice coupled with a hands on personal approach. Their dynamic partnership approach ensures a forward thinking and innovative corporate culture where client service is at the heart.

PENSION SCHEME BANKERS

Barclays Bank PLC

GENERAL ENQUIRIES:Email: info@ethikapension.com

MEMBER ENQUIRIES: Email: ae@warwickeaton.co.ukTel: 0161 979 0366

The Ethika Auto Enrolment Pension Scheme is registered with HMRC as an occupational pension scheme PSTR 00807504RK and regulated by the Pensions Regulator ref 12009065

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