pensions auto-enrolment: understanding your responsibilities
TRANSCRIPT
PENSIONS AUTO ENROLMENT: UNDERSTANDING YOUR RESPONSIBILITIES
19 JULY 2016
INTRODUCTIONS
• Andrew Campbell Employee Benefits Manager, Lucas Fettes
• Emma Welling Employee Benefits Manager, Lucas Fettes
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AUTOMATIC ENROLMENT (AE)
Background and the story so far
Overview of AE duties and key
employer decisions
AE in practice and managing
employer duties
Questions and answers
INTRODUCTION AND BACKGROUND
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Flat rate state pension
Increased state retirement age
Diminishing final salary scheme
Removal of default
Retirement Age
State Pension time bomb
THE STORY SO FAR
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Period Ending Completed declaration of compliance
Workers enrolled
March 2013 84 308,000March 2014 10,817 3,200,000March 2015 45,820 5,200,000 March 2016 110,103 6,100,000
REMAINING STAGING DATE TIMETABLE
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Employer Size Quarter (Financial Year) Forecast Volumes
Small and micro employers
Q1 2016/2017 101,000Q2 2016/2017 133,000Q3 2016/2017 168,000Q4 2016/2017 215,000
New employers
Q1 2017/2018 178,000Q2 2017/2018 137,000Q3 2017/2018 131,000Q4 2017/2018 87,000
FAILURE TO COMPLY
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Initial Fixed Penalty £400
Number of people in PAYE Scheme Daily accrual rate
1 – 4 £50
5 – 49 £500
50 – 249 £2,500
250 – 499 £5,000
500 or more £10,000
PLANNING AHEAD OF YOUR STAGING DATE - CHOOSING A PENSION SUPPLIER
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• Check existing arrangements• Identify if you need to establish a new workplace pension scheme • Decide if you will undertake a market review• Will you seek advice• Implement your scheme
PLANNING AHEAD OF YOUR STAGING DATE – PENSION FUNDING
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Employer Pays Employee Pays* Total
Up to 5th April 2018 1% 1% 2%
From 6th April 2018 to 5th April 2019 2% 3% 5%
From 6th April 2019 3% 5% 8%
Minimum contribution requirements
Based on ‘Qualifying Earnings’ (total earnings between £5,824 and £43,000)
I*inclusive of tax relief
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• Pensionable earnings:- Set 1 basic pay- Set 2 basic pay where it represents 85% of total pay- Set 3 total pay
Employer Pays Employee Pays Total
Set 1 4% 5% 9%
Set 2 3% 5% 8%
Set 3 3% 4% 7%
PLANNING AHEAD OF YOUR STAGING DATE – PENSION FUNDING
PLANNING AHEAD OF YOUR STAGING DATE – AUTO ENROLMENT COMPLIANCE
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• Where will this be carried out?- Payroll- Pension Supplier - 3rd Party - HMRC Basic PAYE tool
PLANNING AHEAD OF YOUR STAGING DATE – HR AND STAFF COMMUNICATIONS
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• Communicate decisions made to existing staff- Optional pre–staging date announcement- Staff Presentations- Webinars- Posters- Payslip Inserts
• Consider how and when you communicate with new employees • Review contracts of employment
AT YOUR STAGING DATE - WORKER ASSESSMENTS
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Staff type Age band Earnings Enrolment Duty Employer Contributions
Eligible jobholders22 – SPA*
£10,000+Must be
automatically enrolled
Yes
Non-eligible jobholders
16 – 21 orSPA – 74 £10,000+
Have a right to opt inYes
16 – 74 Above £5,824 but below £10,000
Entitled workers 16 - 74 Up to £5,824 Have a right to join No
*SPA – State Pension Age
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• Assessments will need to be conducted each pay period • Recorded and evidenced• Correct contributions deducted• Pension reports sent to pension supplier• Statutory communications sent to workers
AT YOUR STAGING DATE - INITIAL COMPLIANCE DUTIES
AT YOUR STAGING DATE- COMMUNICATIONS TO WORKERS
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• Statutory assessment outcome communications- Enrolment notice - General notice - Postponement notice
• Enrolment pack from pension supplier with opt-out instructions
POST STAGING DATE – ONGOING EMPLOYER DUTIES
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• Completion of your declaration of compliance• Delivery of new joiner process • Managing opt-in and opt-out requests
Communications will need to be issued when:
- New employees join the payroll- Employees on the payroll turn 22 and become eligible - Employees whose earnings increase due to a pay spike
POST STAGING DATE- FUTURE GOVERNANCE AND OVERSIGHT
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• Annual review of the pension scheme• Re-enrolment • Triennial Declaration of Compliance
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Background and the story so far
Overview of AE duties and key
employer decisions
AE in practice and managing
employer duties
Questions and answers
SUMMARY
WHERE CAN YOU GET MORE INFORMATION
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Lucas Fettes auto-enrolment helpline – 0345 357 8910
http://www.easyasae.co.uk
