surrey chambers final
TRANSCRIPT
Welcome Page
• Surrey Chamber of Commerce
• Logos
Source ONS Sept 2014 report
Pensions Auto Enrolment
Tuesday 11th November 2014
Source ONS Sept 2014 report
Welcome from Surrey Chambers of Commerce
Source ONS Sept 2014 report
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
Source ONS Sept 2014 report
• 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.
Source ONS Sept 2014 report
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
Source ONS Sept 2014 report
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
Source ONS Sept 2014 report
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
Source ONS Sept 2014 report
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.
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Surrey Chamber of Commerce & MBR
Wealth Management Auto Enrolment
Practical Advice
Jeremy Leslie-Smith
Industry liaison manager
Tuesday 11th November 2014
Automatic enrolment
Employer Duties
The information we provide is for guidance only and
should not be taken as a definitive interpretation of the law.
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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)
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• 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?
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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
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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
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Planning timeline - www.tpr.gov.uk/planner
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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
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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
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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
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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.
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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).
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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.
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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
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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
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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.
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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.
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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
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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
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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
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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
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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).
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‘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).
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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’
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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’
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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’
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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.
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Any questions?
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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
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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
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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
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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
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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.
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
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
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Surrey Chamber of Commerce & MBR Wealth Management Auto Enrolment Practical Advice
Jeremy Leslie-SmithIndustry liaison manager
Tuesday 11th November 2014
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.
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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’.
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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
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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
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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
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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
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Intelligence
% of intelligence referrals 1 April 2013 to 31 March 2014
Source: The Pensions Regulator Automatic enrolment: commentary and analysis 2014
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• 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
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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
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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
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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
So now you understand....
How do you control/record this?
• Pension providers
• Payroll system- AE add on
• Your in house HR team
• Your accountants
Source ONS Sept 2014 report
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
Source ONS Sept 2014 report
Regulated pension?
• Currently AE is NOT regulated by the FCA
What pension Scandal?
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
Source ONS Sept 2014 report
Q & A
Source ONS Sept 2014 report
Thank you for attending.We would now like to invite you to our Drinks Reception and Meet the
Providers.