scottish life we’re going through chaenges… for professional advisers only
TRANSCRIPT
Know the technical changes affecting auto enrolment
Have an understanding of the main changes affecting the workplace pensions market
Understand how these changes could impact on your business
Learning outcomes
Minimum quality standards Charge cap
Deferred Member PenaltiesActive Member Discounts
Transparency Scale
Commissions
Source: DWP: Better workplace pensions: Further measures for savers, March 2014
Commission and CC ban: Timeline
March 2014
DWP Command
paper published
April 2015
Consultancy charging banned
April 2016
Commission banned
Source: DWP: Better workplace pensions: Further measures for savers, March 2014
Adviser Charging and AE schemes
Adviser charging can be used
Individual advice and normal client agreement required
Are workers paying for advice to the employer?
Is AC paid for workers automatically enrolled?
Unlikely that provider will allow this
Unlikely that FCA / TPR will like this...DWP can legislate
û û
Adviser Charging and AE schemes
Adviser charging NOT banned
Normal client agreement required
Individual advice AFTER automatic enrolment
Individual advice for transfersüDon’t tr
y and replicate
commission/consultancy charging
through adviser charging
Limited Liability Partnerships (LLPs)
Are members of an LLP “ workers”?
“The immediately striking thing about this case is how much hard work has to be done in order to find that a member of an LLP
is not a worker ...”
Lady Hale
Source: The Supreme Court, JUDGMENT, Clyde & Co LLP and another (Respondents) v Bates van Winkelhof (Appellant)
Limited Liability Partnerships (LLPs)
“Our view is that an LLP should assume that the Supreme Court’s decision is
equally applicable and as such, members of an LLP could be considered workers
for automatic enrolment.”
Source: The Pensions Regulator, Automatic enrolment Compliance and enforcement Quarterly bulletin, April-June 2014
“This ruling applies retrospectively.”
Limited Liability Partnerships (LLPs)
Check TPR guidance, and consider:
Integration within the organisation
Dependence/subordination, and
Exclusivity (ie could the individual provide services to anyone else).
Source: The Pensions Regulator, Automatic enrolment Compliance and enforcement Quarterly bulletin, April-June 2014
Employers in doubt should
seek legal advice!
Question 2
Do you have any clients who will be impacted by thechange in worker definition?
a) Yes, individual clients
b) Yes, corporate clients
c) Both
d) None
Pot follows member “Federated” model
PensionScheme
PensionScheme
Option to opt out
AFTER AE
Data Handler
Data Handler
Data Handler
Data Handler
Transfer House
A new definition of pension scheme:
Pension Schemes Bill
Defined BenefitFULL pensions
promise
Defined ContributionNO pensions
promise
Shared Risk SchemePARTIAL pensions
promise
High Employer Risk High Employee Risk
Collective Benefits Schemes
Employer Cost
Shared Risk Scheme (SRS) Models
Accumulation Decumulation
Money Back
Capital & investment
Retirement income
insurance
Retirement income builder
Collective Benefit Schemes (CBSs)
DCG’TEE
?
Industry/union wide
Aspirational benefit
Guaranteedbenefit
Conditional indexation
Conditional benefits above any guarantee
Source: Department for Work and Pensions, Reshaping workplace pensions for future generations, June 2014
Key findings – July 2012 to September 2014
33,660 registrations
19,135,000total workers
4,748,000eligible
jobholders
Source: The Pensions Regulator, Automatic enrolment monthly declaration of compliance, October 2014
Compliance notice
Information notice
Fixed penalty notice
Unpaid cont. notice
Inspection
177
10
61 3
Source: The Pensions Regulator, Automatic enrolment compliance and enforcement, 1 July – 30 September 2014
Use of formal powers – July 2012 – Sept 2014(Selected powers used in the period)
6
0
50000
100000
150000
200000
250000
Staging volumes by quarterExcluding new employers
Sources: The Pensions Regulator, “Employer staging forecast”, January 2014NEST insight report 2014
201428,600
201546,300
2016512,000
2017215,000
Market reaction...
• Providers are re-pricing and/or moving to a dual charging structure
• More ‘plug-n-play’ , streamlined AE solutions will come to market to deal with capacity
• Payroll might become the primary source of AE software – providers will need to introduce integrated, seamless data solutions
• Possible secondary market created by:• First re-enrolment dates in 2015• Failure of AE systems• Schemes being re-priced• Providers/advisers exiting market
Action points
• Existing schemes:• What is the charge?• Are active member discounts in place?• What commission is being taken?
• Do you have clients affected by the definition of worker?
• Plan ahead
• Contact Scottish Life: www.scottishlife.co.uk
Question 3
Would you like more information on
a) The changes affecting AMDs, commission and charges
b) How Scottish Life can assist you with designing an
AE solution for your client
c) All of the above
d) None of the above
A FEW WORDS ABOUT OUR
• Scottish Life is rebranding to Royal London.
• Our name may be changing, but the same outstanding products, values and service teams will remain.
• We’re as committed to advisers as ever.
REBRAND
KEY DATES
•New Royal London brand unveiled
•Nationwide, TV, press and outdoor advertising
•Cricket sponsorship starts
MAY
• Ongoing communications with advisers and employers about our rebrand
JUNE / JULY
• Ongoing customer comms starting from Aug
AUGUST
• Scottish Life rebrands to Royal London.
NOVEMBER
32
We look forward to doing business with you for many years to come – as Royal London.
www.scottishlife.co.uk/rebrand
THANKYOU
The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The firm is on the Financial Services Register, registration number 117672. It provides life assurance and pensions and is a member of the Association of British Insurers and the Association of Financial Mutuals. Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street,
London EC3V 0RL. Royal London Marketing Limited is authorised and regulated by the Financial Conduct Authority and introduces Royal London’s customers to other insurance
companies. The firm is on the Financial Services Register, registration number 302391. Registered in England and Wales number 4414137. Registered office: 55 Gracechurch Street, London EC3V 0RL.
Royal London Corporate Pension Services Limited is authorised and regulated by the Financial Conduct Authority and provides pension services. The firm is on the Financial Services Register, registration number 460304. Registered in England and Wales number 5817049. Registered office: 55 Gracechurch Street, London EC3V
0RL.44PR0905 June 14
The information provided is based on our current understanding of the relevant legislation and regulation and may be subject to alteration as a result of changes in legislation and practice as well as the circumstances of the individual.
The figures shown in any case studies are examples only, and while they highlight some of the opportunities for planning, it should be recognised that they are not an exhaustive description of the opportunities or pitfalls.
Important information
Scottish Life is a division of the Royal London Group which consists of the Royal London Mutual Insurance Society Limited and its subsidiaries.
The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The firm is on the Financial Services Register, registration number 117672. It provides life assurance and pensions and is a member of the Association of British Insurers and the Association of Financial Mutuals.
Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street, London, EC3V 0RL.
Royal London Marketing Limited is authorised and regulated by the Financial Conduct Authority and introduces Royal London’s customers to other insurance companies. The firm is on the Financial Services Register, registration number 302391.
Registered in England and Wales number 4414137. Registered office: 55 Gracechurch Street, London, EC3V 0RL.
Royal London Corporate Pension Services Limited is authorised and regulated by the Financial Conduct Authority and provides pension services. The firm is on the Financial Services Register, registration number 460304.
Registered in England and Wales number 5817049. Registered office: 55 Gracechurch Street, London, EC3V 0RL.
October 2014 - 2TPR0951