E M P L O Y M E N T & B U S I N E S S L A W Y E R S 1 W W W . T H E L E G A L PA R T N E R S . C O M

Workplace Pensions

Your 7 Point Plan

How to comply

Make it work for your business

Avoid big penalties

Get staff on side

Richard Mullett Richard.Mullett@TheLegalPartners.com 0208 334 8049

All in.. but into what exactly ??

E M P L O Y M E N T & B U S I N E S S L A W Y E R S 2 W W W . T H E L E G A L PA R T N E R S . C O M

Pension Auto-Enrolment = Workplace Pensions

1 How your business is affected

2 7 Point Plan

3  Battle Stories & Practical Tips

4  Fixed Price services  

E M P L O Y M E N T & B U S I N E S S L A W Y E R S 3 W W W . T H E L E G A L PA R T N E R S . C O M

Pension Contributions Gross earnings: Salary, Commission, Bonus, Overtime, Sick Pay, Statutory Maternity Pay between £5,668 and £41,450

Date Employer minimum contribution

Total minimum contribution

Employer's staging date to 30 September 2017

1% 2%

October 2017 to

30 September 2018

2% 5%

1 October 2018 onwards 3% 8%

E M P L O Y M E N T & B U S I N E S S L A W Y E R S 4 W W W . T H E L E G A L PA R T N E R S . C O M

Cebr - £15bn cost over next 5 years

Centre for Economics Business Research

Pension contributions: £11.6 billion over next 5 years. Set-up costs: average:

£8,900 for small businesses (4 or less employees) £12,600 for SMEs. Planning & Preparation time: "up to 103 man days" Ongoing administration tasks: upto 3 days a month for

some companies.

E M P L O Y M E N T & B U S I N E S S L A W Y E R S 5 W W W . T H E L E G A L PA R T N E R S . C O M

7 Point Plan – 9 Months

1 Know your Staging Date & Nominate a Contact

2 Assess Your Workforce & Develop a Plan

3 Review Pension Plans, Employment Contracts and Staff Handbooks & Select Advisers

4 Communicate to your workers

5 Automatically enrol “eligible jobholders”

6 Register with the Pensions Regulator & keep records

7 Contribute to your worker’s scheme

+ what also to do

E M P L O Y M E N T & B U S I N E S S L A W Y E R S 6 W W W . T H E L E G A L PA R T N E R S . C O M

1 Know your Staging Date & Nominate a Contact

Employer Size Enrolment Date250+ 1 Oct 2012 to 1 Feb 201450 to 249+ 1 April 2014 to 1 April 201530 to 49 members 1 August 2015 to 1 Oct 2015Less than 30 1 Jan 2016 to 1 April 2017Remaining & New employers 1 April 2017 onwards

Postpone Start for 3 Months but ..staff can ask to opt in during this 3 month period

HMRC records. Do not assume correct! Go to http://www.thepensionsregulator.gov.uk/employers/tools/staging-date.aspx.

Nominated Contact gets reminders from the Pensions Regulator to stay on track!Get your business registered!

E M P L O Y M E N T & B U S I N E S S L A W Y E R S 7 W W W . T H E L E G A L PA R T N E R S . C O M

2 Assess Your Workforce & Develop a Plan

Look at who is: eligible £9,440 per year “Eligible Salary” = auto enrol + 1%

employer & 2% employee pension contribution non-eligible – may opt in & enrol + 1% employer & 2%

employee pension contribution not eligible – right to join but no right to employer contribution

Work out likely employer contributions: Involve CEO & CFO, HR, Accountants and Lawyers Cashflow planning & Set up and running budget HR Communication at the right time of year

Register on line – start the process. Avoid last minute rush

E M P L O Y M E N T & B U S I N E S S L A W Y E R S 8 W W W . T H E L E G A L PA R T N E R S . C O M

Over 90% - Stay In

Over 90 per cent of people who have been placed into a workplace pension by their employer are staying in.

Department for Work and Pensions (DWP) 8 August 2013

50 biggest employers - on average just 9% opt out. Previously: DWP research showed 30% were likely to opt out.

Why? More under 30s staying in a pension scheme than other age groups.

E M P L O Y M E N T & B U S I N E S S L A W Y E R S 9 W W W . T H E L E G A L PA R T N E R S . C O M

3 Select Advisers, Review Pension Plans, Employment Contracts & Staff Handbooks

Who is a worker? Employees (full & part-time etc), Contractors, Agency staff?

If workers are eligible, you need a pension planUse existing pension plan?If it complies use it If not – need new schemeGive a copy of new pension scheme to workers Change employment contracts & Staff

Handbooks

E M P L O Y M E N T & B U S I N E S S L A W Y E R S 10 W W W . T H E L E G A L PA R T N E R S . C O M

4 Communicate to your workers

Raise awareness – newsletters, posters

Regular communication

Less take home salary but pension benefit

Write 1 month before implementation date – minimum!

Template letters

E M P L O Y M E N T & B U S I N E S S L A W Y E R S 11 W W W . T H E L E G A L PA R T N E R S . C O M

5 Automatically enrol “eligible jobholders”

At the Staging Date – double check who automatically enrols & who could opt in. 1 month to enrol.

Give pension scheme provider all the details so the pension scheme makes the investments.

Start making 1% monthly contributions

No inducements allowed to opt out. Breach of the law.

E M P L O Y M E N T & B U S I N E S S L A W Y E R S 12 W W W . T H E L E G A L PA R T N E R S . C O M

6 Register with the Pensions Regulator & keep records

4 months from the Staging Date

Notify:

the name of the pension scheme provider + unique Employer Pension Scheme Reference No or NEST ID

How many workers and how many enrolled

CEO details

Get Government Gateway ID code & unique letter code from the Pensions Regulator

E M P L O Y M E N T & B U S I N E S S L A W Y E R S 13 W W W . T H E L E G A L PA R T N E R S . C O M

Keep Records

Staff & pension scheme: names and addresses of staff automatically enrolled contributions payable to the pension scheme and when

they were paid any opt-in or opt-out notices you receive name and address of the pension scheme employer pension scheme reference or pension scheme

registry number.Storage and AccessGood governance and proof of compliance with your

duties.Keep for 6 years

E M P L O Y M E N T & B U S I N E S S L A W Y E R S 14 W W W . T H E L E G A L PA R T N E R S . C O M

7 Contribute to your worker’s scheme

Deduct and pay regular contributions

Process Opt outs

Processing opt ins

Processing opt-in requests

Regularly monitor ages and earnings as this affects workers

Pay rises

Joiners & Leavers

E M P L O Y M E N T & B U S I N E S S L A W Y E R S 15 W W W . T H E L E G A L PA R T N E R S . C O M

Battle Stories & Practical Tips

What not to do v What to do 1 Check with Payroll & Pension providers - plan and get costings

and select right supplier 2 Test – dummy run 3 months before with named Directors3 Do not think that postponing by 3 months solves all the issues. 4 Use the 3 month waiting period before new joiners enter to

your advantage (eg after 3 month probationary period). 5 Communicate with the workers!6 Correct Staff records. Format data for pension provider.7 Look out for 25 Nov 13 Automatic enrolment: annual

evaluation report & Government campaigns – this will raise awareness even more!

8 Pension Providers & NEST – pros and cons. Cost effective automated solution.

E M P L O Y M E N T & B U S I N E S S L A W Y E R S 16 W W W . T H E L E G A L PA R T N E R S . C O M

HR & Employment & Business Law Issues

Existing workers

Changing Employment Contracts – it’s a package. Sell the benefits.

Staff Handbooks

Outsourcing

Contracts with Advisers & New Pension Providers

New & Existing Payroll Providers – new contract & SLA. Payroll staff & TUPE

Hiring New Workers

What you can say and not say

E M P L O Y M E N T & B U S I N E S S L A W Y E R S 17 W W W . T H E L E G A L PA R T N E R S . C O M

Fixed Price Services

Review Your PlanReview / Negotiate New Contracts with Advisers,

Pension Providers & Payroll Providers Assess which workers qualify Review Employment Contracts & Staff

Handbooks and best way to communicateTrainingTemplate LettersBe there to help

E M P L O Y M E N T & B U S I N E S S L A W Y E R S 18 W W W . T H E L E G A L PA R T N E R S . C O M

Enforcement & Penalties!

Non-statutory actionGuidance and instruction. Warning letter confirming a set time frame for

compliance with the lawStatutory noticesStatutory notices to make business comply with the law and / or pay any

missed or late contributions + interest.Penalty noticesA fixed penalty notice: £400 Escalating penalty notice for failure to comply with a statutory notice: £50

to £10,000 per day depending upon the number of workers.Fail to pay contributions due: up to £5,000 for individuals and up to

£50,000 for organisations.Fail to comply with a compliance notice/breach of the law: prohibited

recruitment conduct penalty notice: £5,000 for businesses with over 250 staff.

Court action: Pension Regulator“We aim to fully recover all the penalties that we issue.”

E M P L O Y M E N T & B U S I N E S S L A W Y E R S 19 W W W . T H E L E G A L PA R T N E R S . C O M

In summary

Tell your CEO/CFO and plan now with your HR Team Engage your advisers Join us for our HR Forums in 2014: follow @thelegalpartner

CONTACT RICHARD.MULLETT@THELEGALPARTNERS.COM

T: 0208 334 8049

Take Advice from

The Legal PartnersCopyright: The Legal Partners Limited. All Rights Reserved