pensions auto-enrolment: understanding your responsibilities
TRANSCRIPT
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PENSIONS AUTO ENROLMENT: UNDERSTANDING YOUR RESPONSIBILITIES
19 JULY 2016
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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WHERE CAN YOU GET MORE INFORMATION
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Lucas Fettes auto-enrolment helpline – 0345 357 8910
http://www.easyasae.co.uk