Now we’ll take a look at automatic enrolment. We’ll cover: the basic factsAll of the information is based on our current understanding of draft regulations and legislation and may be subject to change.
Summary• Auto Enrolment is designed to get more people saving for the future• Employers must have some sort of pension provision for all employees• Employers need to identify their staging date – this determines when their employer’s duties will apply• Employers will have to set-up and contribute to a pension scheme suitable for automatic enrolment
• Employers must assess their workforce to determine which duties they need to carry out• Employers will have different duties depending on the types of worker they employ• Employers will need to keep records of how they’ve met and continue to meet their duties• The Pensions Regulator (TPR) will ensure employers comply with the new duties and impose penalties on those who don’t
Or else... Compliance/unpaid contributionWarning notice„Wake up call‟ Fixed penalty - £400 Escalating penalty Workers Penalty per day 1-4 £50Persistent offenders 5-49 £500 50-249 £2,500 250-499 £5,000 500+ £10,000
What happens if you get it wrong? Prohibited recruitment conduct Workers Fixed penalty 1-4 £1,000 5-49 £1,500 50-249 £2,500 250+ £5,000 Third parties £400 fixed £200 per day escalating
Doing nothing is not an option...The Pensions Act 2008, Section 45(2)“A person guilty of an offence under thissection is liable -a) on conviction on indictment, to imprisonment for a term not exceeding two years, or to a fine, or both;b) on summary conviction to a fine not exceeding the statutory maximum.”
“…there is a risk if we allowed employers to say “we left it too late and it was difficult”, it would set a precedent. We cannot have that kind of excuse,”... TPR spokesman New Model Adviser 21/09/2012Source: New Model Adviser “TPR shows no mercy as firms struggle with auto enrolment” 21 September 2012.
Hot topics(the importance of professional connections) Who is a worker? Contractual enrolment Salary exchange Payroll Car allowances NEST changes...etc...
Employers required to register by staging date 50 or more people in PAYE scheme (lower estimate) 2,000-2,999 160-89Source: The Pensions Regulator, “Automatic enrolment: Staging profile and forecast volumes”, September 2012
Employers required to register by staging date 49 or less people in PAYE scheme (lower estimate)140,000 <30Source: The Pensions Regulator, “Automatic enrolment: Staging profile and forecast volumes”, September 2012
Employer help? "Our research shows that…employers with as few as one hundred staff - are expecting help from NEST and other providers…the fact is we wont be able to and neither will any other provider.“ Roy Porter, NEST assistant director, distributionSource: www.professionalpensions.com, “NEST warns small employers will not be ‘hand held’”, 30 October 2012
Getting adviceSource: DWP Research Report No 546 ,‘Employers’ attitudes and likely reactions to the workplace pension reforms 2007”
Auto-enrolment is happening!! You need to act now Speak to your Financial Adviser