Auto Enrolment: Systems & Schemes • Your pension arrangements • Your payroll & IT systems • The questions you might need to ask to ensure these systems work together • Who will be involved and what will be their role

1. DM2594051 v1AThis presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
Automatic Enrolment webinar
- Systems & Schemes
Welcome
26th September 2013

2. DM2594051 v1AThis presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
Since the recording of this webinar there have been a number of changes in
automatic enrolment legislation. The principles described remain the same. The
changes are:
Automatic enrolment
Changes in legislation - 1 April 2014
• The deadline for completing registration with the regulator has been extended to five
calendar months.
• The period for completing automatic enrolment (joining window) has been extended
to 6 weeks
• A new definition of a pay reference period has been introduced which allows
employers to choose to align the assessment of their workers to tax weeks or tax
months
• The deadline for a number of the information requirements has been extended to 6
weeks www.tpr.gov.uk/docs/resource-info-to-workers.pdf
• The Opt-out window remains as one calendar month.
• For the earnings thresholds for the current tax year visit our website at:
www.tpr.gov.uk/earnings-thresholds
The information we provide is for guidance only and should not
be taken as a definitive interpretation of the law.

3. DM2594051 v1AThis presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
Scope of the webinar
• Introduction
• Your pension arrangements
• Your payroll & IT systems
• The questions you might need to ask to ensure these systems work
together
• Who will be involved and what will be their role

4. DM2594051 v1AThis presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
Automatic Enrolment legislation give 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
 Facilitate Opt Outs within the opt out period and promptly refund contributions
 Complete registration with The Pensions Regulator
 Keep records
 Maintain contributions
 Automatically re-enrol all eligible jobholders every three years
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 & employee safeguards

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Staging profile (volumes of employers & workers)
ERSP Staging Profile set 19 January 2012, forecast on 1 April 2012 data
-
Sep-12
Dec-12
Mar-13
Jun-13
Sep-13
Dec-13
Mar-14
Jun-14
Sep-14
Dec-14
Mar-15
Jun-15
Sep-15
Dec-15
Mar-16
Jun-16
Sep-16
Dec-16
Mar-17
Jun-17
Sep-17
Dec-17
Mar-18
Employees
1
Employersperstage
Total employers required to complete registration Employees to be assessed ('000s)
Average of 10,000 medium
size employers staging
each month in
April, May & July 2014
Numberofemployers
Numberofstaffemployed

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Payroll & IT systems
Automatic Enrolment webinar
- Systems & Schemes

7. DM2594051 v1A The content of these slides should not be altered in any way.
No
STEP 1
Assessment
Date
Are they an
Active Member of
a Qualifying
Scheme?
Total QE
paid in PRP
> earnings
trigger ?
Yes
Yes
No
No
Aged
between
22 and
SPA?
Are they
excluded from
Assessment†
?
No statutory
duty to enrol
No Yes
Yes
STEP 2
Automatic
Enrolment
No statutory
duty to enrol
22nd
Birthday
in this PRP??
No
New Assessment Date
= 22nd Birthday
New Assessment Date
= 1st day of next PRP
Yes
New Assessment Date
= 1st
day of next PRP
Not an
eligible jobholder
Not an
eligible jobholder
†
A person would be excluded if they:
• are not a UK worker; or
• are under 16 or aged 75 or over; or
• do not need to be assessed yet (e.g. subject to Postponement,
Transitional Period or only need to be assessed on Re-enrolment dates).
SPA – State Pension Age
QE – Qualifying Earnings
PRP – Pay Reference Period
In Step 1, given the Assessment
Date, determine if the person
needs to be automatically
enrolled under the legislation:
If you can answer the question
in any ONE of the diamond boxes
to reach a yellow lozenge, then
the person does not have
to be automatically enrolled
under the legislation (yet).
Otherwise, if you have
answered all possible questions,
proceed to Step 2.

8. DM2594051 v1A The content of these slides should not be altered in any way.
In Step 2, the employer needs to
carry out automatic enrolment.
The deadline for all activities is
one month from the Assessment Date,
but the employee contributions
need to be taken on the first payday
on or after the Assessment Date.
Pension scheme contributions will be
calculated based on scheme rules
and dated from the Assessment Date
to the end of the
Pay Reference Period (PRP)
STEP 1
Assessment
Date
STEP 2
Automatic
Enrolment
Scheme administrator sets
up Active Membership
/ sends scheme T&Cs
Issue enrolment letter
to eligible jobholder
Employee contributions
deducted from first pay

9. DM2594051 v1A The content of these slides should not be altered in any way.
STEP 2
Automatic
Enrolment
22nd
Birthday
in this PRP??
No
New Assessment Date
= 22nd Birthday
New Assessment Date
= 1st day of next PRP
Issue enrolment letter
to eligible jobholder
Employee contributions
deducted from first pay
Scheme administrator sets
up Active Membership
/ sends scheme T&Cs
No
STEP 1
Assessment
Date
Are they an
Active Member of
a Qualifying
Scheme?
Yes
Yes
No
No
Aged
between
22 and
SPA?
No statutory
duty to enrol
No Yes
Yes
No statutory
duty to enrol
Not an
eligible jobholder
Not an
eligible jobholder
Total QE
paid in PRP
> earnings
trigger ?
Are they
excluded from
Assessment†
?
New Assessment Date
= 1st
day of next PRP

10. DM2594051 v1A The content of these slides should not be altered in any way.
AE process
Assessment
results
Payment
£
Payroll data
£
Payroll
instructions
£
Pension
Scheme
Rules
£
Enrolment
letter to worker
Enrolment
instructions
to pension
provider

11. DM2594051 v1A The content of these slides should not be altered in any way.
AE process
Assessment
results
Payment
£
Payroll data
£
Payroll
instructions
£
Pension
Scheme
Rules
£
Enrolment
letter to worker
Enrolment
instructions
to pension
provider
Some
payroll software
systems can do
the assessment
and calculate
contributions.

12. DM2594051 v1A The content of these slides should not be altered in any way.
AE process
Assessment
results
Payment
£
Payroll data
£
Payroll
instructions
£
Pension
Scheme
Rules
£
Enrolment
letter to worker
Enrolment
instructions
to pension
provider
Alternatively,
assessment and
contribution
calculations may
be done by
non-payroll software
(“middleware”)

13. DM2594051 v1A The content of these slides should not be altered in any way.
AE process
Assessment
results
Payment
£
Payroll data
£
Payroll
instructions
£
Pension
Scheme
Rules
£
Enrolment
letter to worker
Enrolment
instructions
to pension
provider
Middleware,
in addition to doing the
assessment and
contribution
calculations, may also
handle communications
with your pensions
scheme(s) and issue
letters to workers.
Some pension
scheme
providers
may offer
“middleware”
assessment
services.

14. DM2594051 v1A The content of these slides should not be altered in any way.
AE process
Assessment
results
Payment
£
Payroll data
£
Payroll
instructions
£
Pension
Scheme
Rules
£
Enrolment
letter to worker
Enrolment
instructions
to pension
provider
However, some
middleware systems
may do the
assessment and
communications, but
expect the employer
to calculate
contributions

15. DM2594051 v1A The content of these slides should not be altered in any way.
Yes
Are they an
Eligible
Jobholder?
No statutory
duty to enrol
No
30th
C
1st
R P0 C
1st
R C
1st
R P2
30th
31st
Yes
Total QE
paid in PRP
> earnings
trigger ?
No
Assessment
Day
Scenario after Postponement
• Pay Reference Period (PRP) runs
from 1st
to last day of each month;
• Assessment date on 31st
May is the
last day of the Pay Reference Period
and is after the May payday on 28th;
• Total Qualifying Earnings will
already be known.
If the worker needs to be
automatically enrolled:
• First deduction needs to made
in the next payday - P2 on 28th
June;
• Opt Out window will start
before first deduction taken;
• Contribution based on 100% of June
pensionable pay + 1/31 of May pay
Key:
C – Payroll cutoff
R – Payroll run
P – Payday
Opt Out
window starts
P1
April May June
Issue letter to worker &
set up Active
Membership
Automatic Enrolment
triggered
28th 28th
28th
Scenario
Postponement
to the last
day of PRP
Monthly Pay
Reference Period (PRP)

16. DM2594051 v1AThis presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
Questions to consider
In practice, employers will almost certainly need some software automation.
 Do you intend to use your payroll software to assess your workers?
 Can your payroll provider provide this assessment on your product & version?
 Or would you need to upgrade your payroll system to do this?
 Or, are you going to get another supplier to carry out the assessments
(e.g. pension scheme provider or other non-payroll / middleware provider)?
 Will all of the software do what you need it to do?
 How will you automate staff communications (e.g. a ‘mail merge’ software tool)?
 Can your IT / computer systems cope, if you need to run additional software?
 Where is your data stored (e.g. on an integrated HR/payroll system or separately)?
 How accurate and up to date is your employee data (e.g. NI, address, etc)?
 How will these systems work together – what data standards do they support?
 Talk to your existing providers and any possible new
suppliers about this, well in advance of your staging date.

17. DM2594051 v1AThis presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
Questions to ask suppliers
Does the system support the following:
 Communications with workers
(e.g. does it generate/issue letters or just produce a list of workers that need letters)?
 Does it calculate pension contributions and for what definitions of pensionable pay?
 Can the software calculate less than a whole period pension contribution
(e.g. calculate a pro-rata contribution if a worker is enrolled into the scheme
mid-way through the PRP – they may be turning 22 years old)?
 Can the software calculate more than a whole period pension contribution
(e.g. can you use Postponement to the last day of the PRP)?
 What flexibility is there - configuring different Postponement rules for various scenarios?
 What data standards are supported / what pension schemes can it connect with?
For middleware assessment software only:
 What payroll systems will it support (e.g. data formats used for input & output) ?
If you have more than one AE scheme – and will use a pension provider’s middleware :
 Will the software assess workers who would be enrolled into another provider’s pension
scheme, if they triggered automatic enrolment?

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Planning timeline 08 01 May 2014
Your registration
deadline
02 Sep 2014
www.tpr.gov.uk/employers/planning-for-automatic-enrolment.aspx
?

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Who is responsible - develop a plan
To ensure they can comply with their duties, employers are likely to have to consider:
 HR issues (e.g. employment & non-employee contracts, employee data accuracy, employee
benefits policies, new joiner processes, staff communications, etc);
 Pensions issues (e.g. impact on existing pensions schemes & their members, whether to
use an existing scheme or a new scheme for automatic enrolment, etc);
 Payroll issues (e.g. pay cycles, payroll cut-offs, payroll data accuracy, refunds, contribution
calculations, processes which span tax years, etc);
 Information Technology (IT) issues: (e.g. computer systems, reliability & networking
issues, data standards to allow different software/systems to work together, etc);
 Procurement issues: (e.g. any plans to buy new IT systems/software or pensions schemes
or upgrade/change existing systems/software, etc);
 Financial issues: (e.g. forecasting and budgeting for any impact on costs, etc).
 Employers should make sure they involve the right people in their
own organisation and in all their suppliers (or potential suppliers).

20. DM2594051 v1AThis presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
Pension Schemes
Automatic Enrolment webinar
- Systems & Schemes

21. DM2594051 v1AThis presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
Pension schemes types
• Pension schemes can be either:
 Defined Contribution (DC) – e.g. ‘money purchase’
 Defined Benefit (DB) – e.g. ‘Final Salary’ or ‘Career Average’
 Hybrid – a mix of DB and DC
• An Automatic enrolment scheme must be used for:
 the automatic enrolment of Eligible Jobholders;
 the enrolment of any Jobholders who ‘Opt In’.
• Qualifying schemes
 If an existing scheme is not a Qualifying Scheme :
 Scheme members would need to be automatically enrolled into
an Automatic Enrolment scheme, if they are Eligible Jobholders.
 Employers may want to change the contributions levels and/or scheme
rules of their existing schemes to make them qualifying.

22. DM2594051 v1AThis presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
What pension schemes can be used?
Scheme for
Entitled
Workers
 scheme is
registered
 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 are not
required to make an
employer contribution
Employers will
need to contribute
to the pension
scheme Employers may
also use a
Qualifying Scheme
or an Automatic
Enrolment Scheme
for
Entitled Workers
†
European Economic Area states

23. DM2594051 v1AThis presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
Min DC 8%
total*
Min DC 5%
total*
Minimum DC 2% total contribution*
DC Scheme Minimum Contributions
May
2017
April
2014
Oct
2018
Oct
2012
Oct
2017
June
2015
Large
employers
Medium
employers
Small/micro
employers
New born
Employers
* % of Qualifying Earnings
Feb
2018
Minimum DC 1% employer contribution*
Min DC 2%
employer*
Min DC 3%
employer*
Phase 1 Phase 2
Phase 3

24. DM2594051 v1AThis presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
Review your pensions
Employers should consider what they need to do about their pension schemes.
 For your existing pensions scheme (if you have one):
 Are there any existing active members (e.g. members currently contributing)?
 Could any of the existing members be (or become) Eligible Jobholders?
 Does the scheme satisfy the minimum criteria?
See: www.tpr.gov.uk/employers/explaining-qualifying-schemes.aspx
 Do you want to use this scheme as an automatic enrolment scheme? ...
... your existing scheme provider may not allow it be made an automatic
enrolment scheme (e.g. the scheme provider needs to issue Opt Out forms).
 If you need to or want to use a new scheme for automatic enrolment:
 How will you choose the scheme provider, scheme and default fund?
See: www.tpr.gov.uk/docs/selecting-a-good-automatic-enrolment-scheme.pdf
 Some scheme providers may not wish to offer you a pension scheme.
 Providers may be at full capacity – or have long waiting times.
 NEST are obliged to offer you a pension scheme ... but don’t leave it too late!

25. DM2594051 v1AThis presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
Choosing a good quality scheme
Scheme simplicity
Workers should be able to
understand the scheme
(but if they don’t make any
decisions they are still
protected).
Investment
options
Is the default
investment strategy
suitable?
Managing
Investments
Know who is
responsible for
monitoring these
default strategies.
Value for money
Are the costs and
charges competitive and
good value for the
services provided
Pension
Provider
The skills,
knowledge and
processes of those
running your
pension scheme
are vital.
Communications
The scheme provider
should regularly send
good quality
communications to
members
What makes
a good
quality
scheme?

26. DM2594051 v1A This presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way
Useful Links
• Main steps to prepare for automatic enrolment
www.tpr.gov.uk/employers/main-steps.aspx
• Detailed guides for Employers
(and pension professionals):
www.tpr.gov.uk/pensions-reform/detailed-guidance.aspx
• Planning for Automatic Enrolment
www.tpr.gov.uk/employers/planning-for-automatic-enrolment.aspx
• What information do employers need to provide to their workers?
www.tpr.gov.uk/docs/Pensions-reform-resource-information-to-workers.pdf
• Letter templates for employers:
www.tpr.gov.uk/employers/letter-templates-for-employers.aspx
• Information about Registration and employer checklist:
www.thepensionsregulator.gov.uk/employers/registration.aspx
www.tpr.gov.uk/docs/automatic-enrolment-online-registration-checklist.pdf
• Logo for Automatic Enrolment (“3 coins”): (choose “I only require automatic enrolment assets”)
https://communicationcentre.dwp.gov.uk/dwp/index.php
• Detailed guides for Software Developers:
www.tpr.gov/employers/software-developers.aspx

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Please input your questions now
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