Automatic enrolment                                                                             Industry Liaison Team     ...
Topics•     Staging dates & overall timetable•     Transitional Period•     What is a worker?•     Worker categories and t...
What employers will need to do•      Nominate a point of contact•      Know your staging date and develop a plan•      Ass...
Staging profile (1st April 12 data)                                                                 ERSP Staging Profile s...
Determining the Staging Date•       The Staging Date is the start date of the employer’s automatic enrolment duties.•     ...
Staging Dates for Large Employers                             No. Staff in Largest PAYE                                   ...
Changing the Staging Date•       All employers who were using a PAYE scheme on 1st April 2012 now have their        Stagin...
DC Phasing / DB Transitional Period / Staging                                                                             ...
What is a worker? A worker is defined as any individual who:    works under a contract of employment (an employee), or  ...
Categorisation of Workers ¥                         Age Range                                                            ...
Thresholds v Pay Reference Periods (PRP)    Pay Reference Period †                                Lower level of qualifyin...
“Qualifying Earnings” ‘Qualifying Earnings’ (QE) used for two purposes:        1. Assessments  to determine worker categ...
Automatic Enrolment Process•       The Assessment Date is either:           – The employers Staging Date for any existing ...
Transitional Period (Defined Benefits / Hybrid schemes only)•       The option to apply a Transitional Period can only be ...
Postponement (Waiting Period)•       Postponement can be used:           – At the employer’s Staging Date for any existing...
Are they an                             Yes                              No            No             Are they            ...
In Step 2, the employer needs to    carry out automatic enrolment.   The deadline for all activities isone month from the ...
Are they an                                  Yes                              No            No             Are they       ...
Contractual v Statutory Automatic Enrolment•        Some organisations have a policy of automatically enrolling staff. If ...
Assessment                                                                                             Key:               ...
Assessment                                      Key:                                                                      ...
Monitoring eligibilityIf a worker ceases Active Membership of a Qualifying Scheme, for example:     • the scheme ceases to...
Re-enrolment•     Re-enrolment date is on every 3 year anniversary of employer’s staging date.•     All workers will need ...
Opting Out•       Employer Inducement & Coercion rules apply (since 1 st July 2012).•       Employer MUST NOT handle pre-‘...
Automatic Enrolment                           Timescales surrounding automatic enrolment and opting out                   ...
Opting In / Joining•       Non-Eligible Jobholders can Opt In at any time.•       Eligible Jobholders can Opt In during a ...
How & when to communicate to workers•         Communications must be direct (e.g. letter, e-mail, payslip, HR web-portal)....
What to communicate to workers•       On staging, workers already members of a qualifying pension scheme must be        pr...
Record Keeping•     Employers, as well as trustees, managers and providers of a pension scheme,      must keep records abo...
Data to be kept by employersData will need to be kept for: Workers who become scheme members   (e.g. Name, DoB, NI number...
Register with The Pensions Regulator•       Employers MUST register with TPR to confirm they have complied.•       Deadlin...
Common Myths                                    Myth                                                                      ...
Useful Links•      Staging Date tool         www.tpr.gov.uk/employers/tools/staging-date.aspx•      “7 steps to prepare fo...
Pension Schemes Automatic enrolment scheme criteria         – Only those schemes used for automatic enrolment need to mee...
Automatic enrolment schemesDM1995429 v9h This presentation remains the property of The Pensions Regulator. The content of ...
The criteria to be an auto enrolment scheme  •       Any scheme into which you automatically enrol workers will need to be...
How to check if your existing DB scheme qualifies DB pension schemes:        – Does the employer have a contracted-out ce...
How to check if your existing DC scheme qualifies DC pension schemes:        –       How do the scheme rules or agreement...
Minimum requirements for DC schemes•       A Defined Contribution (DC) pension scheme would meet the minimum        requir...
DC Self CertificationThe MAEW review recommendation was that the minimum requirements can be met byDC pension schemes if, ...
DC Self Certification during Phasing Period                              Up to                    1st Oct 2017            ...
The DC Regulatory Programme•        1. To work with providers of work based pension products to ensure         schemes are...
DC Regulatory Programme - Publications•        A list of draft key features which detail what features a scheme should    ...
Automatic enrolment– Close                                                www.tpr.gov.ukDM1995429 v9h This presentation re...
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Auto Enrolment Slides from The Pensions Regulator

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Pension auto enrolment and workplace pensions - key issues explained by The Pensions Regulator

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  • Some of you may have already heard this message, I hope you have, I make no apology for repeating it: Think about where you are on the 8 steps to automatic enrolment Nominate a contact – we will we ask employers to identify a main point of contact with whom we can communicate Know your staging date and develop a plan – staging date is based upon the PAYA scheme reference data we hold as at 1 st April this year – if you are unsure of your staging date please contact us Assess your workforce – our guidance will help you to understand what you need to do to establish who is eligible for A/E Review your pensions arrangements – does your scheme qualify, have you chosen a scheme? Communicate the changes to all your workers – make sure you understand what you need to communicate and when and then put plans in place to do so Automatically enrol your eligible jobholders – make sure you understand how you will do this Register with the Pensions Regulator and keep records – we will let you know by when you need to register and what information you need to provide – you will be able to do this on line Contribute to your workers pensions – make sure that you have processes in place and checks to ensure that contributions flow through to the scheme
  • And here you can see how the number of employees to be automatically enrolled is spread across the staging profile with very high volumes of employees being enrolled by September 2014.
  • Staging Important to remember employers being introduced in stages over a period of years – not a big bang approach – starting with largest… We are already talking to those employers who will be the first to reach their staging date There is a tool on our website that enables employers to look up their duty date Staging will help the pensions industry to manage the increase in work that will be associated with the new duties, it will avoid us having a T5 moment. We want to make sure that employers have a positive experience to auto-enrolment. Phasing Phasing will ease the immediate financial burden on employers of fulfilling their duties
  • Auto Enrolment Slides from The Pensions Regulator

    1. 1. Automatic enrolment Industry Liaison Team February 2013DM1995429 v9h This presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
    2. 2. Topics• Staging dates & overall timetable• Transitional Period• What is a worker?• Worker categories and the duties & rights for pension scheme enrolment• Communicating with workers• Qualifying Earnings and the Automatic Enrolment processes• Postponement• Contractual enrolment• Opt Ins, Opt Outs & refunds• Monitoring worker status and Re-enrolment• Keeping records• Registering with the regulator• Pension schemes and Self CertificationDM1995429 v9h This presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
    3. 3. What employers will need to do• Nominate a point of contact• Know your staging date and develop a plan• Assess your workforce• Review your pension arrangements• Communicate the changes to all your workers• Automatically enrol your eligible jobholders• Register with the regulator and keep records• Contribute to your workers’ pensionsDM1995429 v9h This presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
    4. 4. Staging profile (1st April 12 data) ERSP Staging Profile set 19 January 2012, forecast on 1 April 2012 data Employers per stageEmployees 1 Sep-12 Dec-12 Jun-13 Sep-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Mar-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 - DM1995429 v9h This presentation remains the property of TPR. The contentto register Total Employers required of these slides should not be altered in any way Employees to be assessed (000s)
    5. 5. Determining the Staging Date• The Staging Date is the start date of the employer’s automatic enrolment duties.• For employers where all the PAYEs they use had <30 people on 1st April 2012, their Staging Date will be June 2015 or later (based on the characters in the PAYE reference numbers).• For employers using any PAYE with 30 or more people on 1 st April 2012, the Staging Date is: – determined by the number of people in the largest PAYE scheme that the employer was using on 1st April 2012; – based on the PAYE data provided to TPR by HMRC on 1st April 2012; and – the number of people in the PAYE may include some staff who are no longer employed by them; and – the PAYE people count may also include those only being paid a pension.  The employer will not necessarily know their PAYE count, as it will probably not be equal to the number of employees.  An employer will have an earlier Staging Date if they have at least one person paid under a PAYE scheme larger than their own “main” PAYE (e.g. their ‘parent’ company’s PAYE ref).† For details refer to Employer’s Detailed Guides no.2 Getting Ready, Para 26 Table 1 DM1995429 v9h This presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
    6. 6. Staging Dates for Large Employers No. Staff in Largest PAYE Staging Date 120,000 or more 1st Oct 2012 50,000-119,999 1st Nov 2012 30,000-49,999 1st Jan 2013 20,000-29,999 1st Feb 2013 10,000-19,999 1st Mar 2013 6,000-9,999 1st Apr 2013 4,100-5,999 1st May 2013 4,000-4,099 1st Jun 2013 3,000-3,999 1st Jul 2013 2,000-2,999 1st Aug 2013 1,250-1,999 1st Sep 2013 800-1,249 1st Oct 2013 500-799 1st Nov 2013 350-499 1st Jan 2014 250-349 1st Feb 2014DM1995429 v9h This presentation remains the property of TPR. The content of these slides should not be altered in any way
    7. 7. Changing the Staging Date• All employers who were using a PAYE scheme on 1st April 2012 now have their Staging Date set and:  All future fluctuations in PAYE sizes have no effect on the Staging Date;  The duties apply to all of the employer’s workers, irrespective of which PAYE scheme they are paid through;  If at a given point in time, an employer has no workers, then they will have no duties.• Any employer may bring their staging date forward to an earlier date (must be the 1st of the month), but will need to inform TPR giving at least one month’s notice.• An employer with fewer than 50 workers on 1st April 2012 may (without notifying TPR) delay their staging date until a date between August 2015 and April 2017 †.† For details refer to Employer’s Detailed Guides no.2 Getting Ready, para 26 Table 1 DM1995429 v9h This presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
    8. 8. DC Phasing / DB Transitional Period / Staging * % of Qualifying Earnings DB/Hybrid Transitional Period Min DC 8% total* Min DC 5% total* Min DC 3% Min DC 2% total contribution* Min DC 2% employer* Min DC 1% employer contribution* employer* Large Medium Small/micro New born employers employers employers Employers Feb Oct Mar May May Oct Oct 20182012 2014 2015 2017 2017 2018 DM1995429 v9h This presentation remains the property of TPR. The content of these slides should not be altered in any way
    9. 9. What is a worker? A worker is defined as any individual who:  works under a contract of employment (an employee), or  has a contract to perform work or services personally (i.e. they cannot send a substitute or sub-contract the work) - and is not undertaking the work as part of their own business. A contract does not have to be in writing, it can be a verbal contract. The terms of employment can be implied, rather than explicitly stated. Multiple contracts with 1 individual may require a separate assessment. The physical location of the employer or worker is not a determining factor (e.g. the employer may be based outside of the UK). The following people are not classified as workers:  An office-holder (e.g. non-executive director, trustee, elected member);  Any serving member of the Crown naval, military or air forces (or Cadets);  An individual who is the only employee in a company of which they are also a director. DM1995429 v9h This presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
    10. 10. Categorisation of Workers ¥ Age Range  16-21 22-SPA* SPA*-74Earnings† Under lower earnings Entitled Worker threshold (<£5,564pa) (can request to join a scheme) Between £5,564pa and Non-eligible Jobholder £8,105pa (can Opt In to an autoenrolment scheme) Over earnings trigger for Eligible Non-eligible Non-eligible automatic enrolment Jobholder Jobholder Jobholder (>£8,105pa) (must autoenrol)† Qualifying Earnings contractually due to be paid in Pay Reference Period* SPA = State Pension Age¥ Who work / ordinarily work in the UK (excluding the Channel Isles and Isle of Man)DM1995429 v9h This presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way
    11. 11. Thresholds v Pay Reference Periods (PRP) Pay Reference Period † Lower level of qualifying Earnings trigger for earnings (2012/13) automatic enrolment Annual £5,564 pa £8,105 pa 1 quarter £1,391.00 £2,027.00 1 month £464.00 £676.00 4 weeks £428.00 £624.00 Fortnight £214.00 £312.00 1 week £107.00 £156.00† For other PRP durations, multiply the number of weeks in the PRP by the weekly amount (ie £107.00) ornumber of months by the monthly amount (ie £676.00) - 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.DM1995429 v9h This presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way
    12. 12. “Qualifying Earnings” ‘Qualifying Earnings’ (QE) used for two purposes: 1. Assessments  to determine worker category / eligibility; 2. Definition of pensionable earnings for a Qualifying Pension Scheme. Qualifying Earnings is defined as all of the following items paid to a worker: • salary • wages • commission • bonuses • overtime • statutory sick pay • statutory maternity pay • ordinary or additional statutory paternity pay • statutory adoption pay; and  any pay element which could be considered as any of the above. If Qualifying Earnings used for pension scheme rules, only Qualifying Earnings between £5,564†pa and £42,475†pa used for calculation of pension contributions (e.g. for 1 week Pay Reference Period, if QE <= £107.00 then contribution = £0). † Pro-rata of annual amount used in each Pay Reference Period. These figures are for 2012-2013. The Secretary of State will review this amount each tax year. DM1995429 v9h This presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way
    13. 13. Automatic Enrolment Process• The Assessment Date is either: – The employers Staging Date for any existing workers; – The first day of employment for any new joiner after the staging date; – The birthday of someone turning 22 years old; or – The first day of the Pay Reference Period for any other worker assessed after the employers staging date; or – If Postponement has been used, the last day of the Postponement period.• The total Qualifying Earnings - paid in the Pay Reference Period (PRP) in which the Assessment Day falls – compared to the Earnings Thresholds.• The PRP is the “period of time by reference to which the employer pays the worker their regular wage or salary” (and may not be the pay frequency).• Eligible Jobholders will need to be automatically enrolled within 1 month (the “joining window”) - unless it is possible to use Postponement.• The first employee contribution must be taken on the first payday on or after the Assessment Date.• Scheme membership will be dated and contributions calculated from the Assessment Date. DM1995429 v9h This presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
    14. 14. Transitional Period (Defined Benefits / Hybrid schemes only)• The option to apply a Transitional Period can only be used at the employer’s Staging Date for any or all eligible jobholders who: i. are entitled to be (or are) an active member of a qualifying DB/Hybrid scheme and ii. joined the employer before the staging date†• Is until a fixed date in time  30th Sept 2017 (unless the conditions above cease).• Suspends the duty of assessment and automatic enrolment only for affected staff.• Does NOT change the employer’s staging (or re-enrolment) dates.• Right to Opt In to an automatic enrolment pension scheme during period.• Communication to affected workers – deadline of 1 month after Staging Date.• Employer must assess on 1st October 2017 and: – Automatically enrol (or apply Postponement to) eligible jobholders; or – If not eligible in that Pay Reference Period (PRP), monitor each future PRP.• If the DB/Hybrid scheme is closed, employer may have to offer retrospective membership† (backdated to the staging date).† For full details of the conditions refer to Employer’s Detailed Guides vol 3b. DM1995429 v9h This presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
    15. 15. Postponement (Waiting Period)• Postponement can be used: – At the employer’s Staging Date for any existing workers; – The first day of employment for any new joiner after the staging date; – The date a worker meets the criteria to be an eligible jobholder after the employer’s staging date.• Postponement suspends the duty of assessment and automatic enrolment.• Can be from 1 day up to max of 3 months - and can vary by individual.• Only one postponement at a given time per worker  cannot overlap or concatenate two postponement periods.• Right to Opt In during postponement.• Employer must assess on the last day of postponement: – Automatically enrol eligible jobholders; or – If not eligible at that point, monitor each future pay reference period.• Communication – General notice A & B or Tailored notice. DM1995429 v9h This presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
    16. 16. Are they an Yes No No Are they Yes No statutory Active Member of No statutory excluded from duty to enrol a Qualifying duty to enrol Assessment† ? Scheme? No No Not an Not an eligible jobholder eligible jobholder Aged Total QE STEP 1 between paid in PRP 22 and > earnings Assessment SPA? trigger ? Date New Assessment Date = 1st day of next PRP Yes Yes Yes 22nd Birthday in this PRP??In Step 1, given the Assessment New Assessment Date = 22nd Birthday Date, determine if the person No needs to be automatically enrolled under the regulations: STEP 2 Automatic New Assessment Date If you can answer the question = 1st day of next PRP Enrolmentin any ONE of the diamond boxes to reach a yellow lozenge, then the person does not have to be automatically enrolled † A person would be excluded if they: under the regulations (yet). • are not a UK worker; or • are under 16 or aged 75 or over; or Otherwise, if you have • do not need to be assessed yet (e.g. subject to Postponement,answered all possible questions, Transitional Period or only need to be assessed on Re-enrolment dates). proceed to Step 2. DM1995429 v9h The content of these slides should not be altered in any way.
    17. 17. In Step 2, the employer needs to carry out automatic enrolment. The deadline for all activities isone 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 STEP 1 calculated based on scheme rules and dated from the Assessment Date Assessment Date to the end of the Pay Reference Period (PRP) STEP 2 Issue enrolment letter to eligible jobholder Automatic Enrolment Employee contributions Scheme administrator sets deducted from next pay up Active Membership / sends scheme T&Cs DM1995429 v9h The content of these slides should not be altered in any way.
    18. 18. Are they an Yes No No Are they Yes No statutory Active Member of No statutory excluded from duty to enrol a Qualifying duty to enrol Assessment† ? Scheme? No No Not an Not an eligible jobholder eligible jobholder Aged Total QE STEP 1 between paid in PRP 22 and > earnings Assessment SPA? trigger ? DateNew Assessment Date = 1st day of next PRP Yes Yes 22nd Birthday in this PRP?? New Assessment Date = 22nd Birthday No STEP 2 Issue enrolment letter to eligible jobholder Automatic New Assessment Date Enrolment = 1st day of next PRP Employee contributions Scheme administrator sets deducted from next pay up Active Membership / sends scheme T&Cs DM1995429 v9h The content of these slides should not be altered in any way.
    19. 19. Contractual v Statutory Automatic Enrolment• Some organisations have a policy of automatically enrolling staff. If this enrolment takes place either: • before the employer’s staging date; • before a new worker joins the employer; or • during the Postponement or Transitional periods; then:  if the worker is an Active Member of a Qualifying Scheme on the Assessment Date, then the employer has no duty to automatically enrol.• This enrolment will have been carried out contractually and the statutory processes do not apply (e.g. no Opt Out window or option to withhold payments to scheme).• A worker is considered to have achieved Active Membership: i. for occupational pension schemes, when stated in the scheme rules; or i. for personal pension schemes, when the worker is sent the T&Cs of the agreement to become an active member …• … but membership must take effect from the Assessment Date or the automatic enrolment duty will come into effect. DM1995429 v9h This presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way
    20. 20. Assessment Key: Day Scenario 1 C – Payroll cutoff Monthly Pay Reference Period (PRP) R – Payroll run Assessment P – Payday Date on first day of PRP 1st 30th 1st 31st 1st 30th April May June 28th 28th 28th C R P0 C R P1 C R P2Scenario 1 Opt Out window starts• Pay Reference Period runs from 1stto last day of each month;• Assessment date is the 1 st May; Total QE No Issue letter to worker &• Total Qualifying Earnings may not paid in PRP set up Active > earningsbe known until payroll cutoff or later. trigger ? Membership No statutoryIf the worker needs to be duty to enrol Yesautomatically enrolled:• First deduction needs to madein payday P1 on 28 th May ; Automatic Enrolment• Opt Out window may not start Are they an No triggered Eligibleuntil after deduction taken; Jobholder?• Scheme contribution based on100% of May pensionable pay. Yes DM1995429 v9h This presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
    21. 21. Assessment Key: Scenario 2 Day C – Payroll cutoff Monthly Pay Reference Period (PRP) R – Payroll run Assessment P – Payday Date on last day of PRP 1st 30th 1st 31st 1st 30th April May June 28th 28th 28th C R P0 C R P1 C R P2Scenario 2 Opt Out• Pay Reference Period runs from 1st window startsto last day of each month;• Assessment date on 31st May is thelast day of the Pay Reference Periodand is after the May payday on 28th; Total QE No Issue letter to worker & paid in PRP set up Active• Total Qualifying Earnings will > earnings Membershipalready be known. trigger ?If the worker needs to be No statutory duty to enrolautomatically enrolled: Yes• First deduction needs to madein the next payday - P2 on 28 th June ; Automatic Enrolment• Opt Out window will start Are they an No triggeredbefore first deduction taken; Eligible Jobholder?• Contribution based on 100% of Junepensionable pay + 1/31 of May pay Yes DM1995429 v9h This presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
    22. 22. Monitoring eligibilityIf a worker ceases Active Membership of a Qualifying Scheme, for example: • the scheme ceases to be a Qualifying Scheme; or • the worker Opts Out or otherwise ceases active membership; then the employer will need to continuously assess the worker’s eligibility every Pay Reference Period (and automatically enrol if eligibility triggered)unless: the worker has ever been an Eligible Jobholder and an Active member of a Qualifying Scheme simultaneously, since the latter of: a) the employer’s staging date; or b) the date they started work for the employer; or c) the last day of Postponement or Transitional Period (if used).• Those workers that do fall into the above category can be left until the next appropriate Re-enrolment date (see following slide).DM1995429 v9h This presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
    23. 23. Re-enrolment• Re-enrolment date is on every 3 year anniversary of employer’s staging date.• All workers will need to be re-assessed on this date, except: 1. Active members of a Qualifying Scheme; or 2. Any person who, in the 12 months prior to the Re-enrolment date, has ceased membership; and • has ever simultaneously been an Eligible Jobholder and an Active member of a Qualifying Scheme, since the latter of: a) the employer’s staging date; b) the date they started work for the employer; c) the last day of Postponement or Transitional Period (if used).• An employer may opt to move their Re-enrolment date to any day, up to 3 months before, or after, each third anniversary.• The requirement to communicate with members in a qualifying scheme only applies at the staging date.DM1995429 v9h This presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
    24. 24. Opting Out• Employer Inducement & Coercion rules apply (since 1 st July 2012).• Employer MUST NOT handle pre-‘OptOut’ process or send out Opt Out forms: – Opt-Out process should be managed by pension scheme administrator; – Completed forms normally sent to the employer.• For Opt Outs under the AE regulations (not contractual enrolments): – Employer MUST inform staff of right to Opt Out and how to opt-out. – 1 month Opt-Out Window starts on the latter of two dates:  when Active Membership is achieved; and  when the employer issues a letter/email to the jobholder. – Employee/worker and employer will get full refund of all contributions. – Employee/worker to be paid refund in next payday (unless past payroll cut-off). – Early Opt Outs (before the Opt Out Window starts) - are invalid. – If invalid Opt Out received in Opt Out Window, will extend to 6 weeks in total. – Late Opt-Outs – employer choice: treat as invalid, or as ‘request to cease membership’ under normal scheme rules. DM1995429 v9h This presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
    25. 25. Automatic Enrolment Timescales surrounding automatic enrolment and opting out Window for possible opt-out period Joining window Earliest Latest possible possible date date opt-out opt-out period period ends ends 1 month 1 month Latest date by which active membership andEarliest possible Backdating of scheme provision of jobholder information and enrolmentstart date for 1- membership to the automatic information must be achieved and therefore themonth opt-out period enrolment date latest possible start date for 1-month opt-out period. DM1995429 v9h This presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
    26. 26. Opting In / Joining• Non-Eligible Jobholders can Opt In at any time.• Eligible Jobholders can Opt In during a Postponement or Transitional Period.• Entitled Workers can request to Join a scheme.• On receipt of an Opt In notice / Joining request employers need to: – Assess the worker, based on the total Qualifying Earnings in the Pay Reference Period (PRP) in which the date of receipt falls; – Enrol Jobholders into an automatic enrolment scheme - from the start of the next Pay Reference Period† (or the following PRP, if past payroll cutoff); – Enrol Entitled Workers into a scheme of the employer’s choice.• An Opt In starts an automatic enrolment process, in that the Jobholder must not be required to carry out any further action to achieve active membership.• However, if the employer has received an Opt In notice from the same worker within the past 12 months, there is no obligation to allow the Opt In.† Employers must re-assess the worker in the following PRP and, if the worker is no longer ajobholder, must delay the enrolment until they are assessed as a jobholder in a future PRP. DM1995429 v9h This presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
    27. 27. How & when to communicate to workers• Communications must be direct (e.g. letter, e-mail, payslip, HR web-portal).• At staging, need to communicate to all workers, even scheme members.• Need to inform of rights the first time† a worker becomes a particular category.• Deadlines for communication: • 2 months after Staging for existing scheme members; or • 1 month after Staging for workers who are not already in a qualifying pension scheme; or • 1 month after the Assessment Date for:  Postponement and Transitional notices;  Enrolment notifications.  For further information: www.tpr.gov.uk/docs/Pensions-reform-resource-information-to-workers.pdf www.tpr.gov.uk/employers/letter-templates-for-employers.aspx † the use of a General Notice A or B Postponement notice discharges this duty DM1995429 v9h This presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
    28. 28. What to communicate to workers• On staging, workers already members of a qualifying pension scheme must be provided with information about the scheme.• Non-eligible jobholders and Entitled workers must be provided with information telling them about their right to Opt In or Join a pension scheme.• For Eligible Jobholders being automatically enrolled (& Non-eligible Jobholders being enrolled after opting in) they must be provided with:  information about their enrolment,  what it means for them, including the contributions, and  their right to opt out.• Workers subject to a deferral of automatic enrolment need to be given key information such as the length of the deferral period and their rights to opt in: • Eligible jobholders subject to the DB Transitional Period; • Any worker subject to a Postponement Period. DWP have provided letter templates for employers: www.tpr.gov.uk/employers/letter-templates-for-employers.aspx DM1995429 v9h This presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
    29. 29. Record Keeping• Employers, as well as trustees, managers and providers of a pension scheme, must keep records about their workers and the pension scheme used to comply with the employer duties.• An employer can use electronic or paper filing systems to keep or store any records, as long as these records are legible or 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 produced to The Pensions Regulator, if requested.• The Pensions Regulator can conduct an audit if they have reasonable grounds to do so (e.g. if there is a Whistleblower).DM1995429 v9h This presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
    30. 30. Data to be kept by employersData will need to be kept for: Workers who become scheme members (e.g. Name, DoB, NI number†, gross qualifying earnings, contributions paid). Plus, for Jobholders only: • Date of automatic enrolment or the original format Opt In notice; • Contributions entitled to under scheme rules. Plus, for Entitled Workers only: • Date with effect from which the worker became an active member; • The original format Joining Notice. All workers for whom the employer has used postponement: (Name, NI number†, date the notice was sent to the worker). Details of the pension scheme(s)†† used: • EPSR (Employer Pension Scheme Reference); • Any evidence showing that a scheme is a Qualifying Scheme; • Pension provider / scheme name & address.† where one exists†† data also to be kept by pension scheme DM1995429 v9h This presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
    31. 31. Register with The Pensions Regulator• Employers MUST register with TPR to confirm they have complied.• Deadline is 4 months after the Staging Date and every re-enrolment date.• Employers will need to provide: – employer details (name, address, email, all PAYE refs used); – details of pension scheme(s) used to comply with the employer duties (e.g. scheme name, address, EPSR, pension scheme registry number); – the last day of any postponement period applied at staging; – number of workers employed on the staging date (or on the last day of any postponement periods); – number of eligible jobholders automatically enrolled into each scheme; – number of workers already active members of a qualifying pension scheme on the staging date; and – the number of eligible jobholders subject to the Transitional Period. For further information on registration see: www.tpr.gov.uk/docs/TPR_Checklist_050712.pdf DM1995429 v9h This presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
    32. 32. Common Myths Myth Reality1. Pay Reference Period is the same as the pay 1. PRP is often the same as pay frequency, but frequency. may not be.2. Any back pay or overpayments require a 2. Only errors (e.g. breach of contract) have to be retrospective evaluation of eligibility. rectified with “reasonable steps”.3. Pensionable pay is used to determine which 3. Qualifying Earnings must be used for category a worker is (e.g. EJH). Assessment, not pensionable earnings.4. A person who leaves a pension scheme can 4. Workers who have not been an EJH and an be left until re-enrolment. active member need to be monitored.5. People contractually enrolled get an Opt Out 5. A contractual enrolment has no “Opt Out window. window”, but can exit under scheme rules6. If pay is paid in arrears, employer can assess 6. Even if pay is in arrears, the assessment only in the preceding PRP. looks at what is payable in that PRP.7. You can’t Opt Out until a contribution has 7. If the Opt Out window opens before the first been taken. payday, a contribution may never be taken.DM1995429 v9h This presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
    33. 33. Useful Links• Staging Date tool www.tpr.gov.uk/employers/tools/staging-date.aspx• “7 steps to prepare for automatic enrolment” www.tpr.gov.uk/employers/7-steps.aspx• Detailed guides for Employers (and pension professionals): www.tpr.gov.uk/pensions-reform/detailed-guidance.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/TPR_Checklist_050712.pdf• Detailed guides for Software Developers: www.tpr.gov.uk/pensions-reform/software-developers.aspx DM1995429 v9h This presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way
    34. 34. Pension Schemes Automatic enrolment scheme criteria – Only those schemes used for automatic enrolment need to meet this criteria Qualifying schemes – Existing schemes with active members need to be qualifying schemes to avoid the duty to automatically enrol eligible jobholders – If the existing scheme is non-qualifying, eligible jobholders need to be enrolled into another scheme Schemes for entitled workers – Scheme is registered under Chapter 2 of Part 4 of the Finance Act 2004 (and in the case of a personal pension scheme there are direct payment arrangements in relation to the worker concerned) Non-UK registered schemes – Non-UK schemes may be determined as qualifying schemes – DWP Consultation on schemes administered in European Economic Area statesDM1995429 v9h This presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
    35. 35. Automatic enrolment schemesDM1995429 v9h This presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
    36. 36. The criteria to be an auto enrolment scheme • Any scheme into which you automatically enrol workers will need to be an automatic enrolment scheme, it must:  be a qualifying scheme and  it must not contain any provisions that: • prevent the employer from making the required arrangements to automatically enrol, opt in or re-enrol a jobholder; • require the jobholder to express a choice in relation to any matter, or to provide any information, in order to remain an active member of the pension scheme. • Schemes administered in a country inside the European Economic Area (EEA) may be used for automatic enrolment if they meet additional criteria. • Schemes administered in a country outside the EEA cannot be an automatic enrolment scheme.DM1995429 v9h This presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
    37. 37. How to check if your existing DB scheme qualifies DB pension schemes: – Does the employer have a contracted-out certificate? – If not, does the scheme meet the test scheme standard? We have published a flow chart as part of the detailed guidance for employers: www.tpr.gov.uk/docs/pensions-reform-pension-schemes-appendix-c.pdf Checking the automatic enrolment criteria (DB and DC):  Does it allow a worker to join it without the worker’s consent?  Does it allow a worker to join it from their first day of employment?  Does it allow a worker to join without having to make any choices (eg about what type of fund their money is invested in) and without having to provide any information (eg filling in a form)?DM1995429 v9h This presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
    38. 38. How to check if your existing DC scheme qualifies DC pension schemes: – How do the scheme rules or agreements define pensionable earnings? • It requires minimum contributions based on qualifying earnings • It requires contributions based on earnings other than qualifying earnings. – What are the required contribution rates? – Do you need to use certification? The regulator has published a tool to help employers check whether their existing DC scheme meets the minimum criteria for an automatic enrolment scheme as set out in legislation: www.tpr.gov.uk/employers/explaining-qualifying-schemes.aspx There are also flowcharts as part of the detailed guidance for employers – Occupational: www.tpr.gov.uk/docs/pensions-reform-pension-schemes-appendix-d-occupational.pdf – Personal: www.tpr.gov.uk/docs/pensions-reform-pension-schemes-appendix-d-personal.pdfDM1995429 v9h This presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
    39. 39. Minimum requirements for DC schemes• A Defined Contribution (DC) pension scheme would meet the minimum requirements if one of these conditions are met:  Under the scheme*, however calculated, the total contribution must be at least 8%** of the jobholder’s qualifying earnings, of which the employer’s contribution must be at least 3%** of the jobholder’s qualifying earnings; or  Where the pension scheme rules define pensionable pay other than qualifying earnings the employer may certify that one of three alternative requirements are met (Self Certification); or  Where the pension scheme rules define pensionable pay other than qualifying earnings the employer may compare the entitlement in their scheme rules against the minimum contribution level in the first bullet.* “Under the scheme” means, in the case of DC occupational schemes, in the scheme rules or other governing documentation and, in the case of DC personal pension schemes, in the agreements between the provider and the employer/member. NB there are additional minimum requirements for personal pensions eg direct payment arrangements must be in place.** Note – contribution levels are being phased in. DM1995429 v9h This presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way.
    40. 40. DC Self CertificationThe MAEW review recommendation was that the minimum requirements can be met byDC pension schemes if, under the scheme rules (or agreements, in the case of apersonal pension scheme): 1. the total minimum contribution must be at least 9% of the scheme’s definition of pensionable pay (at least 4% of which must be the employer’s contribution), or 2. the total minimum contribution must be at least 8% of the scheme’s definition of pensionable pay (at least 3% of which must be the employer’s contribution) provided that pensionable pay constitutes at least 85% of total pay (the ratio of pensionable pay to total pay can be calculated as an average at scheme level); or 3. the total minimum contribution must be at least 7% of the pension scheme’s definition of pensionable pay (at least 3% of which must be the employer’s contribution), provided that total pay is pensionable.DM1995429 v9h This presentation remains the property of TPR. The content of these slides should not be altered in any way
    41. 41. DC Self Certification during Phasing Period Up to 1st Oct 2017 From Pensionable Salary 1st Oct 2017 to 30th Sept 1st Oct 2018 (Basis of 2018 % Contributions) Tier 1 2% Employer 3% Employer 4% Employer Scheme Definition / 3% Total / 6% Total / 9% Total (if >= basic pay from £1) Tier 2 1% Employer 2% Employer 3% Employer ≥85% of Total Pay / 2% Total / 5% Total / 8% Total (scheme average) Tier 3 1% Employer 2% Employer 3% Employer 100% of / 2% Total / 5% Total / 7% Total Total PayDM1995429 v9h This presentation remains the property of TPR. The content of these slides should not be altered in any way
    42. 42. The DC Regulatory Programme• 1. To work with providers of work based pension products to ensure schemes are designed and run to protect the benefits of members. Providers will include trustees, multi-employer scheme providers, insurance companies and investment management firms providing fund wrappers for auto-enrolment use.• 2. To develop a regulatory regime which identifies what features good pension scheme will include, monitors the presence of those features and takes regulatory action where they are not found• 3. To educate and encourage employers to challenge their providers and ensure that the schemes they are selecting are good and thus are run in the best interests of their employees DM1995429 v9h This presentation remains the property of TPR. The content of these slides should not be altered in any way
    43. 43. DC Regulatory Programme - Publications• A list of draft key features which detail what features a scheme should include if it is to protect the benefits of its members• www.tpr.gov.uk/docs/draft-key-features-june-2012.pdf• A leaflet for employers which suggests some questions they could ask their scheme providers to which will support them in selecting a good scheme• www.tpr.gov.uk/docs/selecting-a-good-automatic-enrolment-scheme.pdf DM1995429 v9h This presentation remains the property of TPR. The content of these slides should not be altered in any way
    44. 44. Automatic enrolment– Close www.tpr.gov.ukDM1995429 v9h This presentation remains the property of The Pensions Regulator. The content of these slides should not be altered in any way

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