2. 3 Introduction
3 Auto Enrolment
3 The Employer
3 Non Compliance
3 The reasons for Auto Enrolment
3 The Key steps to Enrolment
4 Staging Dates
5 Contribution Rates
6 Planning time line
7 Workforce Assessment
7 QWPS (Qualifying Workplace Pension Scheme)
8 Communication
8 Monitoring and Managing Records and Data
Table of contents
Auto enrolment is a real challenge. Are you ready?
If you haven’t heard of auto enrolment, you will.
If you think you can ignore it, you cant.
If you’re wondering if there is a simple solution, there is.
Auto Enrolment made simple for you.
MAP Enrolment Solutions can help
An appointment with one of our consultants at your place of work will enable you to talk through the process and
find the correct solution for your company. We have agreements with several companies who are able to provide
a range of services that can be tailored to suit your circumstances and budget. The advantage you have with
MAP Enrolment is that we give you choices, as we do not represent just one provider. We will work along side
your accountant or financial advisor to ensure you are receiving the most up to date information.
Your time for registering may not be for several months, however Auto Enrolment needs forward planning to
confirm acceptance and avoid fines.
Contact us today and arrange a no obligation consultation to find out more about how
auto enrolment affects you.
3. Auto Enrolment
From October 2012 all businesses within the UK will
be effected by Auto Enrolment. As a result all eligible
employees are required to be enrolled within the
Workplace Pension Scheme and make the relevant
contributions.
With this new law it is important that the employer
takes the time to understand the responsibilities and
duties associated with it. Not being prepared can prove
time consuming and more importantly costly.
The Employer
Companies will be required to do the following:
• Know when they need to be ready
• Register with the regulator
• Be aware that Pension schemes must comply with all
regulations
• Manage employee enrolment and contributions
• Communicate
• Keep accurate records
Non compliance
In the event of an employer not complying with what is
required of them:
£400 fine which will escalate for persistent failings -
• 5-49 employees up to £500 per day
• 50-249 employees up to £2,500 per day
• 250-499 employees up £5,000 per day
The reasons for Auto Enrolment
Simply the Government can not afford to fund the
state pension throughout life. Financial restraints mean
people can no longer afford to save for retirement and
as a result they will be dependant on the State Pension.
Introduction
Step 1 Staging Date Analysis
Step 2 Workforce Assessment
Step 3 Analysis of Existing Scheme
Step 4 Communication of changes
Step 5 Auto Enrolment of all eligible workers
Step 6 Commencement of Contributions and administrations of payments
Step 7 Registration with the tPR
Step 8 On going Management, reporting, admin and storage
The Key Steps to Enrolment
3
4. Employees Date
4,000-4,099 01 June 13
4,000-4,099 01 June 13
3,000-3,999 01 July 13
2,000-2,999 01 August 13
1,250-1,999 01 September 13
800-1,249 01 October 13
500-799 01 November 13
350-499 01 January 14
250-349 01 February 14
160-249 01 April 14
90-159 01 May 14
62-89 01 July 14
61 01 August 14
60 01 October 14
59 01 November 14
58 01 January 15
54-57 01 March 15
50-53 01 April 15
Test for fewer than 30 01 June 15 to 30 June 15
30 to 49 01 August 15 to 01 October 15
Fewer than 30 01 January 16 to 01 April 17
To help businesses prepare for the changes associated with Auto Enrolment the process is being introduced
in stages. The end date for all employers to have employees auto enrolled into a qualifying pension scheme is
September 2016.
Your staging date is determined by your Payroll run of April 2012. This date is fixed.
The Staging Dates
Auto Enrolment made simple for you.
4
5. Contribution Rates
The total contribution starts at a level of 2% of earnings with 1% of this being an employer contribution. The
contributions will increase in stages to 8% of earnings, with 3% of this being contributed by the employer by
October 2018. Employers must contribute.
*Including tax rebate on pension contributions
*Quality Test – this is a test that will allow an employer to certify that they are meeting the minimum
contribution requirements for a scheme under their AE requirements. It should be used where there is a
mismatch between a DC pension definition of pensionable pay and that of qualifying earnings under AE
requirements. It is run for 12 months from the staging date to the anniversary taking in all earning types (basic
pay, commission, bonus, overtime) and will allow the employer to calculate if they have hit the 8% contribution
rate on the threshold earnings levels of £5,668 and £41,450.
October 12 – September 17 October 17 – September 18
Minimum Employee rate* 1% 3%
Minimum employer rate 1% 2%
Combined total rate (employee
and employer)
2% 5%
Total Contribution Employer contribution Pensionable Pay
9% of pensionable pay 4% No quality test required
8% of pensionable pay 3% Pensionable pay is at least
85% of the total pay bill for the
workers.
7% of pay 3% All pay is pensionable
5
6. Auto Enrolment made simple for you.
Planning Time Line
No of
Ees
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
12 12 12 13 13 13 13 13 13 13 13 13 13 13 13 14 14 14 14 14 14 14 14 14 14 14 14 15 15 15
1000-
2999
120-1999
800-1249
500-799
350-499
250-349
160-249
90-159
62-89
61
60
59
58
54-57
Planning stage
Implementation and testing stage
Communication and employee engagement stage
Run the solution
Staging date and Enrol employees stage
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
6
7. Workforce Assessment
Employees are defined as Eligible, Non Eligible or Entitled
Eligible
Employees who are aged between 22 and State Pension Age earning above the Lower rate Income Tax
Threshold (£9,440 p.a in 2013/14 terms reviewed annually).
Non-Eligible
Employees who are under 22, over 65, or those workers earning below the Lower Rate Income Tax threshold but
above the qualifying earnings limit (£5,668 in 2013/14 terms).
Entitled
Employees earning below the qualifying earnings limit. Only eligible employees have to be auto-enrolled;
however non eligible and entitled employees can opt-in (although the Company does not need to contribute in
respect of entitled workers). Eligible employees can opt-out, but only after being enrolled and broadly speaking
must be automatically re-enrolled on each third anniversary of the staging date.
QWPS (Qualifying Workplace Pension Scheme)
All Employers will be required to auto-enrol all eligible employees into a qualifying pension scheme. If a pension
scheme can accept new members, the employer will need to decide if it is to be used as a qualifying scheme
for auto enrolment purposes.
How does a scheme qualify
• Staff can automatically opt into it
• The scheme has a “default” investment option
• There is an opt out facility
Worker classification
16 and under
22
Age between
22-SPA*
Over SPA*
under 75
Earnings
Below lowest level earnings
threshold (currently £5,668**)
Entitled
Above lower but below trigger for
automatic enrolment
(currently £9,440**)
Non-Eligible
Above the trigger for automatic
enrolment (currently £9,440**)
Eligible
*SPA = State Pension Scheme **Tax year 2013/2014
7
8. Communication
Inform all workers:
• The correct information at the right time
• On an individual basis
• In writing (email is acceptable)
• Of any/all changes and how they changes affect
them
• Whilst offering no inducement or advice from the
employer
Achieving successful communication:
• Make certain employees feel in control
• Clarify what employees will receive from it
• Relevant information for each employee group
• Presenting information in layman’s terms
• Repeating information across different channels
• Opportunities for questions and answers
• Define roles and responsibilities clearly
Monitoring and Managing
Records and Data
The following need to be monitored:
• Opt-outs, opt-ins (on a monthly basis)
• Re-assess workforce (on a monthly basis)
• Wage increases
• Birthdays
• Retirees
• Contractors
• New joiners
• Potential Postponements
• Employees on probation
• Monitor Leavers
Auto Enrolment made simple for you.
1 Dukes Road, Troon, KA10 6QR. T 01292 317214
www.mapenrol.com
MAP Enrolment Solutions is a trading style of MAP MY Finance ltd
It is compulsory that every company enrols and
provides a pension scheme. Don’t leave it too late
and risk fines. Arrange a consultation today, and
we will help you select the correct solution.
