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Source ONS Sept 2014 report

Pensions Auto Enrolment

Tuesday 11th November 2014


Welcome from Surrey Chambers of Commerce


Agenda• The need for Automatic Enrolment, Matt Ryder

• Employers Duties, Jeremy Leslie-Smith

• Who is a Worker?, Esther White

• Compliance and Enforcement, Jeremy Leslie-Smith

• So how do you comply? Steve Bee

• Getting Advice, Matt Ryder

• Q&A

• Drinks reception

Why the need for AE?

• Aging population

• Life expectancy in retirement in increasing

• Low levels of current pension contributions

• High levels of expectations

• No Govt can afford to meet all expectations

The aging picture in Surrey

• Of all males born today 25% will live longer than 80 years

• Of all females born today only 18% will die before 81 years


• A male aged 65 today has a life expectancy of a further 18.3 years

• A female aged 65 today has a life expectancy of a further 20.8 years.


The very old• 2013 over 500,000 people over 90 years old

• 2013 estimated 13,780 centurions

• In 2011 the Queen sent 9,736 100th Birthday cards


High level of expectation

• Ernst Young survey in 2014

– 68% of workers aged 40-50 EXPECT

– To retire with 75% of Current Earnings

Ernst Young 2014

Income expectations

retirement income

drop in income

Actual Levels• National Average Weekly Earnings

• £479 per week

• New Flat rate pension

• £148 per week

• 70% Pay Cut at retirement


Pension facts• 45% of Men and 49% of Women have NO

pension savings

• 95% of workers in Accommodation and food services have NO pension savings

• The worst English region is London


Auto Enrolment, key dates

• Dec 2002 Pension Commission created

• Oct 2004 Adair report from Pension Commission

• Pensions Act 2008 created AE legislation

• The AE regulations 2012, gave current staging dates.

DM 2921338 These slides remain the property of The Pensions Regulator and their content should not be altered on reproduction.

Surrey Chamber of Commerce & MBR

Wealth Management Auto Enrolment

Practical Advice

Jeremy Leslie-Smith

Industry liaison manager


Automatic enrolment

Employer Duties

The information we provide is for guidance only and

should not be taken as a definitive interpretation of the law.

DM 2750193 v3F These slides remain the property of The Pensions Regulator and their content should not be altered on reproduction.

Topics

• Why is automatic enrolment being introduced?

• What employers need to do

• Staging dates and overall timetable

• Who are your workers?

• Worker categories and the duties and rights for pension scheme enrolment

• Communicating with workers

• Qualifying earnings and the automatic enrolment processes

• Postponement

• Opt-ins and Opt-outs

• Monitoring worker status and re-enrolment

• Keeping records

• Declaration of compliance (registration)


• As a society we are living longer, healthier lives.

• There are currently four people of working age

for every pensioner by 2050 there will be just two.

• Millions of people are under-saving for their retirement.

• Only 1 in 3 private sector workers were in a pension scheme in 2012

and the trend has been downwards for the last 40 years.

• The reforms being introduced now will help millions of individuals to save

more (or save for the first time) for their retirement.

7 million

people are

under-saving

Why is automatic enrolment being introduced?


Automatic enrolment legislation gives employers a duty to:

automatically enrol all eligible jobholders

communicate to workers providing timely and appropriate information

allow non-eligible jobholders to Opt-in and entitled workers to join

manage Opt-outs within the Opt-out period and promptly refund

contributions

automatically re-enrol all eligible jobholders every three years

complete declaration of compliance (registration) with the Regulator

keep records, and

maintain payments of contributions.

The employee safeguards state that employers:

must not induce workers to Opt-out or cease membership of a scheme

must not indicate to a potential jobholder that their decision to Opt-out will

affect the outcome of the recruitment process

Overview of legal duties and safeguards


What employers will need to do

• Know when you need to be ready

• Provide a point of contact

• Develop your initial plans

• Find out who to enrol

• Choose your software and check records

• Choose a pension scheme

• Automatically enrol your staff

• Tell your staff

• Complete your declaration of compliance (registration)

• Maintain records

• Fulfil ongoing responsibilities


Planning timeline - www.tpr.gov.uk/planner

http://www.tpr.gov.uk/planner


Staging

• The employer duties apply to each employer from their staging date:

– the duties apply to all of the employer’s workers from that date.

• The staging date is based on the number of people in the employer’s

PAYE scheme(s) as of 1 April 2012:

– any subsequent changes in PAYE size or usage have no

effect on the staging date.

• Generally, larger employers will stage before smaller ones:

– new employers* will go last, from May 2017.

Oct 2012 May 2017April 2014 June 2015

Large

employersMedium

employersSmall/micro

employersNew* employers

Feb 2018

*Employers that did not exist

(or were not using a PAYE)

as of 1 April 2012.

Do not

assume you

know the

number of

people

- use our tool


Staging profile (volumes of employers)

Planning ahead is key.

Very large volumes

staging from January

2016

Q1 2015/16 peak

includes small and

micro employers


Who are your workers?

Employers will have duties for workers that are:

• aged 16 to 74 (inclusive), and

• who work or ordinarily work in the UK*, and

• it does not matter if they are full or part-time, permanent or temporary.

There may be other people who will also be included:

• overseas workers, who are considered ordinarily working in the UK.

Workers will include:

• employees, and

• people (excluding directors) who are not employees, who are personal

services workers.

* the Channel Isles and the Isle of Man are outside the UK


Are they a personal services worker?

• The employer needs to judge whether or not an individual (who is not a director)

with a contract to perform work or services personally is undertaking

the work as part of their own business.

• 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 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.


Who is excluded?

Exclusions from automatic enrolment duties include:

• some office-holders who are not considered workers, (eg non-executive

director, trustee or elected member), but are only excluded for the

activities they carry out as an office holder

• serving members of the military are not workers, and

• a company with only one employee, if that employee is also a director of

that company (but only for the work they carry out for that company).


Who is the worker’s employer?

• For a worker who works under a contract of employment (an

employee) or who is a personal services worker directly contracted to

perform work for the company who pays them:

the employer will be the legal entity named in the contract.

• Otherwise:

– for a worker who is supplied by an agent to a third party, to perform

work personally, under a contract or arrangement between the agent

and the third party, then:

• the agent or third party will be the agency worker’s employer,

depending on which is responsible for paying the worker

• or, if it cannot be determined who is responsible for paying the

worker, then whichever actually pays the worker will be

considered as their employer.


Qualifying earningsAge range

16-21 22-SPA* SPA*-74

Under £5,668† pa

Between £5,668 pa

and up to £9,440† pa

Non-Non-Eligible Jobholder

Non-Eligible Jobholder

Eligible Jobholder

More than £9,440† pa Non-Eligible

Jobholder

* SPA = State Pension Age

** Figures for 2014/15

Under £5,772** pa

Between £5,772 pa

and up to £10,000** pa

More than £10,000** pa Eligible

jobholder

Employer must

automatically enrol

eligible jobholders into an

automatic enrolment

pension scheme

Worker categories

NonNon-eligible jobholder

-Eligible Jobholder

Non-eligible

jobholder

Non-eligible

jobholder

Non-eligible

jobholders can

Opt-in to an

automatic enrolment

pension scheme

Entitled workerCan request to

join a pension

scheme

DM1995429 v17L This presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way

Thresholds v Pay Reference Periods (PRP) 2014-15

† For other PRP durations, multiply the number of weeks in the PRP by the weekly amount (eg £192.00)

or number of months by the monthly amount (eg £833.00) etc - or pro-rata if not an exact multiple of any of

the above.

N.B. The Secretary of State will review these figures each tax year.

Pay Reference Period

†Lower

Earnings Threshold(LET)

Earnings trigger for automatic enrolment

Upper Earnings Limit

Annual £5,772 pa £10,000 pa £41,865.00 pa

Bi-annual £2,886.00 £4,998.00 £20,933.00

1 quarter £1,443.00 £2,499.00 £10,467.00

1 month £481.00 £833.00 £3,489.00

4 weeks £444.00 £768.00 £3,221.00

Fortnight £222.00 £384.00 £1,611.00

1 week £111.00 £192.00 £805.00


Assessing your workers

• Employers will need to assess all their workers on their staging date

– unless they choose to use ‘postponement’ (described in later slides).

• All qualifying earnings must be used to assess a worker’s category

(ie eligible jobholder, non-eligible jobholder or entitled worker).

• Qualifying earnings is any component of pay that could be considered one of

these pay elements (an employer should use their reasonable judgement):

– salary/wages, commission, bonuses, overtime and some statutory

payments (excluding expenses and dividends).

• Eligible jobholders must be automatically enrolled into a suitable scheme

– but any active member of a ‘qualifying’ pension scheme with that

employer will not need to be automatically enrolled.

• After the staging date, employers will have to:

– assess all new workers who join them

– assess some workers every pay period (see planning tool ‘ongoing responsibilities’)

– assess some workers again every three years.


Check suitability of payroll and IT systems

• What software will you use to carry out:

– assessment

– enrolment

– communications, and

– calculation of pension contributions

• This is likely to require data held by payroll and HR systems.

• Choices:

– payroll software, and/or

– non-payroll software or service (can be referred to as “middleware”)

this may be offered by the pension scheme provider.


Pensionable earnings

• Pensionable earnings can be based on qualifying earnings OR another

definition (eg basic pay).

• When qualifying earnings are used to determine pensionable pay:

– pension contributions are determined by the rules of the scheme, and

– will be based on banded earnings between the lower earnings threshold

and upper earnings limit (currently £5,772*pa and £41,865*pa).

• If pensionable earnings are not based on qualifying earnings, the employer

can self certify** if the scheme meets certain minimum criteria:

– ‘Set 1’ - if basic pay from £1 is pensionable, or

– ‘Set 2’ - if at least 85% of total pay (scheme average) is pensionable, or

– ‘Set 3’ - if 100% of total pay is pensionable.

* Pro-rata of annual amount used in each Pay Reference Period. These figures are for 2014-2015.

The Secretary of State will review this amount each tax year.

** For further details see the DWP guidance document:

www.gov.uk/government/uploads/system/uploads/attachment_data/file/307083/money-purchase-schemes-

guidance.pdf

http://www.gov.uk/government/uploads/system/uploads/attachment_data/file/307083/money-purchase-schemes-guidance.pdf


What pension schemes can be used?

must be registered in the UK or EEA*

must have no barrier to automatic enrolment

must be a qualifying scheme

Automatic enrolment scheme

Qualifying scheme

must be tax registered:

and meet minimum criteria

Workers already

active members of a

qualifying scheme do

not need to be

automatically enrolled

Must be used

for automatic

enrolment and

‘Opt-ins’

Employers will

need to contribute

to the pension

scheme

*European Economic Area states

Employers may also

use a qualifying scheme

or an automatic

enrolment scheme for

entitled workersScheme for

entitled

workers scheme

is registered

Employers are not

required to make an

employer contribution


Min DC

8% total*

Min DC

5% total*

Minimum DC 2% total contribution*

DC scheme minimum contributions

Oct 2018Oct 2017

*% of qualifying earnings

Feb 2018

Minimum DC 1% employer contribution*

Min DC 2%

employer*

Min DC 3%

employer*

Phase 1 Phase 2 Phase 3

Oct 2012 May 2017April 2014 June 2015

Large

employersMedium

employersSmall/micro

employers

New

employers


Postponement

• Postponement suspends the duty of automatic enrolment and the need to

assess and can be used:

– at the employer’s staging date for any or all existing workers

– on the first day of employment for any new joiner after the staging date, and

– on the date a worker meets the criteria to be an eligible jobholder.

• Only one postponement per worker can be made at a given time.

• Each worker can be postponed from one day up to maximum of three months.

• The employer must notify any postponed worker within six weeks and a day

of the start of postponement.

• The worker has the right to Opt-in or join during postponement.

• Employer must assess on the last day of postponement and:

– automatically enrol eligible jobholders, and

– for those workers not eligible, monitor them each future pay period.

Postponement does

not change or delay

the staging date


Opting-in and joining

• Entitled workers can request to join a scheme at any time.

• Non-eligible jobholders can Opt-in at any time.

• Eligible jobholders can Opt-in during postponement.

• On receipt of any request, employers need to:

– assess the worker, to see if they are a jobholder or entitled worker, then

– enrol jobholders into an automatic enrolment scheme, and

– enrol entitled workers into a scheme of the employer’s choice.

• A jobholder must not be required to carry out any further action to achieve

active membership (eg the pension scheme should have a default fund).


‘Opting-out’

• Workers automatically enrolled (or who have opted in) may ‘Opt-out’.

• Employer must inform staff of their right to Opt-out and how to Opt-out.

• The employer must not give out or send out ‘Opt-out’ forms:

– requests to ‘Opt-out’ must be handled by the scheme provider, and

– completed forms would normally be sent to the employer.

• A one calendar month Opt-out window starts on the later of two dates:

once the worker is an active member of the pension scheme, or

when the employer issues a notice of enrolment letter/email to the worker.

• The worker will get a full refund of all contributions.

• Early Opt-outs (before the Opt-out window starts) – are not allowed.

• After the Opt-out window has closed, the worker may still request to cease

membership of the pension scheme (under the scheme rules).


Communicating to workers

• At staging, employers will need to communicate* to all their workers,

(including existing pension scheme members).

• Employers need to inform workers of their rights and whether they are

being automatically enrolled or postponed.

• The deadlines for communication are:

– two months after staging; for existing scheme members, or

– within six weeks for all other communications.

• Communications must be sent directly to the individual

(eg by letter, email, HR web portal).

• We have provided example ‘template’ letters, which may be customised.

* See our planning tool and ‘communicate to staff’


Re-enrolment

• The re-enrolment date is every three years from the employer’s

staging date.

• However, an employer may choose to move their re-enrolment date to any

day, up to 3 months before, or after, the third anniversary.

• The employer will need to continue to assess any workers they are

monitoring* every pay reference period.

• In addition, any person who, on the re-enrolment date:

– 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 an eligible jobholder,

automatically enrolled.

* See our planning tool and ‘ongoing responsibilities’


Record-keeping

• 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).

• An employer can use electronic or paper filing systems to keep or store

any records, as long as these records can be produced in a legible way.

• Most records must be kept for six years. Those that relate to opting out

must be kept for four years.

• The records must be provided to The Pensions Regulator, on request.

• We can conduct an inspection, if we have reasonable grounds to do so

(for example, this may be as a result of a whistleblower alert).

* See planning tool and ‘keep records’


Declaration of compliance (registration)

• Employers must complete a declaration of compliance (registration)

• The deadlines are:

– five months after the staging date and

– two months after every re-enrolment date.

• 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.

• All postponements applied at the staging date must have come to an end

before the declaration can be completed.

• You can start the online process early and partially complete your declaration.


Any questions?


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

• Our detailed guides for employers and pension professionals:

www.tpr.gov.uk/pensions-reform/detailed-guidance.aspx

• Information about declaration of compliance (registration):

www.tpr.gov.uk/declaration

• Letter templates for employers:

www.tpr.gov.uk/employers/letter-templates-for-employers.aspx

• 6 month leaflet

www.tpr.gov.uk/docs/automatic-enrolment-six-month-leaflet.pdf

http://www.tpr.gov.uk/employers/tools/staging-date.aspx

http://www.tpr.gov.uk/planner

http://www.tpr.gov.uk/employers/e-brochure/index.html

http://www.tpr.gov.uk/pensions-reform/detailed-guidance.aspx

http://www.tpr.gov.uk/declaration

http://www.tpr.gov.uk/employers/letter-templates-for-employers.aspx

http://www.tpr.gov.uk/docs/automatic-enrolment-six-month-leaflet.pdf


Useful links continued…

More information about pensions and automatic enrolment:

• The Association of British Insurers:

www.abi.org.uk/pensionproviders

• The National Association of Pension Funds:

www.napf.co.uk

• National Employment Savings Trust:

www.nestpensions.org.uk

• Independent Financial Advisers:

www.unbiased.co.uk

www.vouchedfor.co.uk

• The Pensions Regulator:

www.tpr.gov.uk/docs/selecting-a-good-automatic-enrolment-scheme.pdf

www.tpr.gov.uk/docs/introduction-code-13.pdf

http://www.abi.org.uk/pensionproviders

http://www.napf.co.uk/

http://www.nestpensions.org.uk/

http://www.unbiased.co.uk/

http://www.vouchedfor.co.uk/

http://www.tpr.gov.uk/docs/selecting-a-good-automatic-enrolment-scheme.pdf

http://www.tpr.gov.uk/docs/introduction-code-13.pdf


Useful links continued…

Webinars:

• Automatic enrolment – dispelling the myths

www.tpr.gov.uk/press/webinar-automatic-enrolment-dispelling-the-myths.aspx

• Identifying your workforce and calculating minimum contribution levels

www.tpr.gov.uk/press/webinar-identifying-workforce-calculating-minimum-

contribution.aspx

• Implementing automatic enrolment systems and pension schemes

www.tpr.gov.uk/press/webinar-implementing-automatic-enrolment-systems-

schemes.aspx

• Automatic enrolment – are you ready?

www.tpr.gov.uk/press/webinar-automatic-enrolment-are-you-ready.aspx

• Automatic enrolment registration.

www.tpr.gov.uk/press/webinar-automatic-enrolment-registration.aspx

• Automatic enrolment question time.

www.tpr.gov.uk/press/webinar-automatic-enrolment-question-time.aspx

http://www.tpr.gov.uk/press/webinar-automatic-enrolment-dispelling-the-myths.aspx

http://www.tpr.gov.uk/press/webinar-identifying-workforce-calculating-minimum-contribution.aspx

http://www.tpr.gov.uk/press/webinar-implementing-automatic-enrolment-systems-schemes.aspx

http://www.tpr.gov.uk/press/webinar-automatic-enrolment-are-you-ready.aspx

http://www.tpr.gov.uk/press/webinar-automatic-enrolment-registration.aspx

http://www.tpr.gov.uk/press/webinar-automatic-enrolment-question-time.aspx


Resources

• There is a ‘We’re all in’ poster available to download on our website (you can

add your company name and logo) at

• www.tpr.gov.uk/employers/raising-awareness-about-automatic-enrolment.aspx

http://www.tpr.gov.uk/employers/raising-awareness-about-automatic-enrolment.aspx


We are here to help!

Contact us at:

www.tpr.gov.uk/contact-us.aspx

Subscribe to our news by email:

https://forms.thepensionsregulator.gov.uk/subscribe.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.

http://www.tpr.gov.uk/contact-us.aspx

https://forms.thepensionsregulator.gov.uk/subscribe.aspx

http://www.linkedin.com/groups?gid=2675456

https://twitter.com/TPRgovuk

But who is a Worker?• Not the same as IR35

Zero hours

• Contract for Personal Service

charlesrussellspeechlys.com

Esther White, Senior Associate

Pensions Auto-Enrolment

11 November 2014

Who is a worker?

• who needs to be automatically enrolled into a pension scheme

• obligations to other workers

• if employ workers:• (i) eligible job holders

• (ii) non-eligible jobholders

• (iii) entitled workers

47|

Assessing the workforce

• how do you assess workforce?• assess age• assess whether worker working or ordinarily working in

UK under a contract • assess earnings

• assessment made when? • staging date• new employee• pay reference period

48

Age

• workforce between 16 and 74• age criteria for both jobholder categories and entitled worker

category

• individuals between 22 and state pension age• age criteria for entitled worker category

49|

Ordinarily working in the UK under a contract

• a worker must be working, or “ordinarily working”, in the UK

• the geographical location of the employer is irrelevant

• occasional business trips ok

• not have to be a UK national (so long as working legally)

• ordinarily means – generally where based• airline pilots

• work in UK live in France

• seafarer

• overtime case law will “develop” the meaning

50|

Working under a contract

• includes:

• employees,

• casual or zero hours workers

• agency workers

• full/part-time

• permanent/temporary

• does not include the self-employed

• “contract of service” Vs “contract for services”

• one person company where that person is director business

• beware of verbal contracts/contractual terms and implied terms

• HMRC may apply a different test for tax assessment purposes

51|

Who is a worker? (continued)

• “Contract of service” or “contract for services”?

• right of substitution

• subordination/control

• written contract

• employee benefits

• mutuality of obligation

• financial risk

• tools and equipment

52|

Who is a worker?

• agency workers

• the “employer” is the party (agent or principal) responsible for paying the agency worker (or who actually pays, if the contract is silent)

• secondees

• usually remain employed by the seconding company

• one-person companies

• not caught by auto-enrolment at all – either by the end user or their own personal service company

• office holders

• not normally a worker, eg. non-execs, company secretaries, trustees

53|

Assess pay

• do they earn qualifying earnings?

• in the relevant pay reference period?

54|

Pay issues

• what is the relevant pay reference period?

• the period of time

• by reference to which the employer pays the worker their regular wage or salary, or

• by reference to tax weeks/months

• relevant – pay reference period in which assessment is made

• NB what if paid by piece of work?

• what earnings are payable in that period?

• salary, wages, commission, bonuses, overtime, SSP, SMP, etc.

• note: payable, not paid

55|

The figures: how much do you need to earn to fall within AE?

Pay reference

period

Lower level of qualifying

earnings

The earnings trigger for

automatic enrolment

1 week £111.00 £192.00

Fortnight £222.00 £384.00

4 weeks £444.00 £768.00

1 month £481.00 £833.00

1 quarter £1,443.00 £2,499.00

Bi-annual £2,886.00 £4,998.00

Annual £5,772.00 £10,000.00

Note: These figures are for the 2014-2015 tax year. These figures are reviewed annually

by the Department for Work and Pensions (DWP). Where there is a change, the figures for

the next tax year after they have been announced by the DWP, as well as the historic and

current figures, can be found on www.tpr.gov.uk/earnings-thresholds

www.tpr.gov.uk/earnings-thresholds.

56

http://www.tpr.gov.uk/earnings-thresholds

http://www.tpr.gov.uk/earnings-thresholds

Categories of worker

Earnings (2014-2015) Age (inclusive)

16-21 22-SPA**State pension age

SPA*-74

Under lower earnings threshold

(£5,772 p/a) Entitled worker

Between lower earnings

threshold (£5,772 p/a) and

earning trigger for automatic

enrolment (£10,000 p/a)

Non-eligible jobholder

Over earnings trigger for

automatic enrolment (£10,000

p/a)

Non-

eligible

jobholder

Eligible

jobholder

Non-

eligible

jobholder

57

What do you have to provide

58

– Eligible jobholder

– automatically enrolled

– entitled to employer contributions

– Non-eligible jobholder

– can ask to be enrolled

– entitled to employer contributions

– Entitled worker

– can ask to be enrolled

– not entitled to employer contribution

charlesrussellspeechlys.com

Charles Russell Speechlys LLP is a limited liability partnership registered in England and Wales, registered number OC311850, and is authorised and regulated by the Solicitors Regulation Authority. Charles Russell Speechlys LLP is also licensed by the Qatar Financial Centre

Authority in respect of its branch office in Doha. Any reference to a partner in relation to Charles Russell Speechlys LLP is to a member of Charles Russell Speechlys LLP or an employee with equivalent standing and qualifications. A list of members and of non-members who are

described as partners, is available for inspection at the registered office, 5 Fleet Place, London. EC4M 7RD.

Is this going far enough?Australia

Currently 9.5%

2017-18 increases to 10%

2021 onwards increases to 12%

Denmark

On average currently 15%

UK Auto Enrolment will be 8% in 2017-18

Source google

Smarter. Simpler. Better. 61

How much could be in your pension pot?

22 years old

If you were paying standard auto enrolment contributions into your pension pot from the 1st of October 2014 from the ages of:

Until you are 68 years old on the average salary in the UK (£26,500), the size of your pension pot will be:

32 years old 42 years old

NOW: £645,8230.50%: £619,806 0.75%: £585,9451.00%: £554,476

NOW: £322,2570.50%: £312,865 0.75%: £299,7001.00%: £287,857

NOW: £146,7940.50%: £143,794 0.75%: £139,4591.00%: £135,459

* Calculations done using NOW: Pensions’ fund modeller assuming 4% per annum salary growth and 5% per annum investment growth, NOW: Pensions charges: 0.3% AMC + £1.50pm admin fee


Surrey Chamber of Commerce & MBR Wealth Management Auto Enrolment Practical Advice

Jeremy Leslie-SmithIndustry liaison manager


Automatic enrolment

Compliance and enforcement

The information we provide is for guidance only and

should not be taken as a definitive interpretation of the law.


What’s happened so far …

• As at the end of September 2014

• 33,660 employers have completed their Declaration of Compliance (Registration),

• covering over 19m workers, of which:

• around 4.7m people were automatically enrolled; and

• 9.1m were already in a qualifying scheme;

• 426k workers had the Transitional Period applied;

• and 4.9m were ‘none of the above’.


Our approach:

• Educate

• Enable

• Enforce

To meet our statutory objective: to maximise employer compliance with

employer duties

• we are risk based and proportionate.

Follow the principles of good regulation:

• Proportionate, accountable, consistent, transparent and targeted

The Regulator’s role


The materials we produce are aligned to meeting the needs of employers in

a changing market and they include:

• guidance – both detailed and simplified

• online learning resources

• research and analysis, and

• reports.

We work proactively and flexibly with employers, providers and trustees to

resolve non-contentious issues. This includes taking steps to:

• identify potential problems at an early stage, and

• enable our key audiences to find solutions, which may sometimes include the use of our powers.

Supporting employers – education and enablement


How do we know about instances of non compliance?

• whistleblowing

• information analysis, such as comparing declaration of compliance (registration) data

with current PAYE data

• sharing intelligence with other agencies

• targeted pro-active visits to employers who are at high risk of non-compliance

(possibly as a result of the industry sector they are in)

• employers call us

Non-compliance


Informal action

• instructions by telephone, letter, email and in person

• warning letter - for minor alleged breach with timeframe for compliance

Statutory powers – gathering information

• formal requests for information (if a breach is suspected)

• failure to comply may lead to criminal prosecution/civil penalties

• inspection powers - failure to comply may lead to criminal prosecution

Statutory notices issued to employers or third parties

Penalties

• Fixed penalty notices £400 / Escalating penalty notices £50-£10,000 daily

Civil debt recovery

Criminal prosecution / Proceeds of Crime Act 2002

Enforcement powers


Intelligence

% of intelligence referrals 1 April 2013 to 31 March 2014

Source: The Pensions Regulator Automatic enrolment: commentary and analysis 2014

http://www.thepensionsregulator.gov.uk/docs/automatic-enrolment-commentary-analysis-2014.pdf


• Formal action (as at 30 September 2014):

• 10 information notices

• 6 statutory inspection notices

• 177 compliance notices

• 1 unpaid contribution notice

• 3 fixed penalty notices

Use of powers

1,278 cases closed by

30 September 2014


What if an employer makes a mistake and fails to carry out their duties?

Tell the Regulator about the breach. TPR’s approach is an employer:

• should take reasonable steps to put the worker back in the position they would have been in if compliance had occurred on time, and

• should not profit from their mistake.

That means the employer should:

• enrol them, backdated to the original date, and

• ensure backdated employer pension contributions are paid, and

• ensure backdated employee pension contributions are collected.

If TPR decides to take formal action against the employer and the worker should

have been enrolled more than 3 months ago, TPR has the power to:

• require the employer to pay both their own and employee contributions, and

• require interest to be added to outstanding contributions.

Remedying a breach


Our approach:

• To educate and enable employers to help them comply.

• Where an employer has not understood the duties or has not complied

• we will work with them to try and achieve compliance

• We want employers to contact us if they are experiencing difficulties

If an employer chooses to ignore their duties - this is unacceptable:

• we will use our powers as necessary to ensure compliance.

In particular, statutory notices will be issued and therefore fines for :

• failing to complete a Declaration of Compliance (Register)

• late payments.

Summary


Useful links

Monthly registration report

www.tpr.gov.uk/docs/automatic-enrolment-monthly-registration-report.pdf

Automatic enrolment: commentary and analysis 2014

www.tpr.gov.uk/docs/automatic-enrolment-commentary-analysis-2014.pdf

Compliance and enforcement quarterly bulletin (June 2014)

www.tpr.gov.uk/docs/automatic-enrolment-use-of-powers-june-2014.pdf

Compliance and enforcement strategy

www.tpr.gov.uk/docs/pensions-reform-compliance-and-enforcement-strategy.pdf

Compliance and enforcement policy

www.tpr.gov.uk/docs/pensions-reform-compliance-and-enforcement-policy.pdf

http://www.tpr.gov.uk/docs/automatic-enrolment-monthly-registration-report.pdf

http://www.tpr.gov.uk/docs/automatic-enrolment-commentary-analysis-2014.pdf

http://www.tpr.gov.uk/docs/automatic-enrolment-use-of-powers-june-2014.pdf

http://www.tpr.gov.uk/docs/pensions-reform-compliance-and-enforcement-strategy.pdf

http://www.tpr.gov.uk/docs/pensions-reform-compliance-and-enforcement-policy.pdf

So now you understand....

How do you control/record this?

• Pension providers

• Payroll system- AE add on

• Your in house HR team

• Your accountants


Who is doing what?• There are many aspects of staging

• There are many aspects of going live

• There are many aspects every Pay period

• Who is doing which bits????

• What are system limitations?

Steve Bee


Regulated pension?

• Currently AE is NOT regulated by the FCA

What pension Scandal?

Please get advice

Matthew [email protected]

07825757248

mailto:[email protected]

5 things to take away

1. Know your staging date

2. Prepare 12 months out

3. Who is a worker

4. Payroll systems, can/can’t do

5. Get Accredited Advice

Drinks Recpetion

• Company Logos


Q & A


Thank you for attending.We would now like to invite you to our Drinks Reception and Meet the

Providers.

Documents

Surrey Chambers Final