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Pensions auto-enrolment: Understanding your responsibilities

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Presentation slides from a webinar which took place on 19 July 2016.

Watch the webinar: https://www.youtube.com/watch?v=0-RMtDWLKh4&feature=youtu.be

Published in: Government & Nonprofit
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Pensions auto-enrolment: Understanding your responsibilities

  1. 1. PENSIONS AUTO ENROLMENT: UNDERSTANDING YOUR RESPONSIBILITIES 19 JULY 2016
  2. 2. INTRODUCTIONS • Andrew Campbell Employee Benefits Manager, Lucas Fettes • Emma Welling Employee Benefits Manager, Lucas Fettes
  3. 3. AUTOMATIC ENROLMENT (AE) 3 Background and the story so far Overview of AE duties and key employer decisions AE in practice and managing employer duties Questions and answers
  4. 4. INTRODUCTION AND BACKGROUND 4 Flat rate state pension Increased state retirement age Diminishing final salary scheme Removal of default Retirement Age State Pension time bomb
  5. 5. THE STORY SO FAR 5 Period Ending Completed declaration of compliance Workers enrolled March 2013 84 308,000 March 2014 10,817 3,200,000 March 2015 45,820 5,200,000 March 2016 110,103 6,100,000
  6. 6. REMAINING STAGING DATE TIMETABLE 6 Employer Size Quarter (Financial Year) Forecast Volumes Small and micro employers Q1 2016/2017 101,000 Q2 2016/2017 133,000 Q3 2016/2017 168,000 Q4 2016/2017 215,000 New employers Q1 2017/2018 178,000 Q2 2017/2018 137,000 Q3 2017/2018 131,000 Q4 2017/2018 87,000
  7. 7. FAILURE TO COMPLY 7 Initial Fixed Penalty £400 Number of people in PAYE Scheme Daily accrual rate 1 – 4 £50 5 – 49 £500 50 – 249 £2,500 250 – 499 £5,000 500 or more £10,000
  8. 8. PLANNING AHEAD OF YOUR STAGING DATE - CHOOSING A PENSION SUPPLIER 8 • Check existing arrangements • Identify if you need to establish a new workplace pension scheme • Decide if you will undertake a market review • Will you seek advice • Implement your scheme
  9. 9. PLANNING AHEAD OF YOUR STAGING DATE – PENSION FUNDING 9 Employer Pays Employee Pays* Total Up to 5th April 2018 1% 1% 2% From 6th April 2018 to 5th April 2019 2% 3% 5% From 6th April 2019 3% 5% 8% Minimum contribution requirements Based on ‘Qualifying Earnings’ (total earnings between £5,824 and £43,000) I*inclusive of tax relief
  10. 10. 10 • Pensionable earnings: - Set 1 basic pay - Set 2 basic pay where it represents 85% of total pay - Set 3 total pay Employer Pays Employee Pays Total Set 1 4% 5% 9% Set 2 3% 5% 8% Set 3 3% 4% 7% PLANNING AHEAD OF YOUR STAGING DATE – PENSION FUNDING
  11. 11. PLANNING AHEAD OF YOUR STAGING DATE – AUTO ENROLMENT COMPLIANCE 11 • Where will this be carried out? - Payroll - Pension Supplier - 3rd Party - HMRC Basic PAYE tool
  12. 12. PLANNING AHEAD OF YOUR STAGING DATE – HR AND STAFF COMMUNICATIONS 12 • Communicate decisions made to existing staff - Optional pre–staging date announcement - Staff Presentations - Webinars - Posters - Payslip Inserts • Consider how and when you communicate with new employees • Review contracts of employment
  13. 13. AT YOUR STAGING DATE - WORKER ASSESSMENTS 13 Staff type Age band Earnings Enrolment Duty Employer Contributions Eligible jobholders 22 – SPA* £10,000+ Must be automatically enrolled Yes Non-eligible jobholders 16 – 21 or SPA – 74 £10,000+ Have a right to opt in Yes 16 – 74 Above £5,824 but below £10,000 Entitled workers 16 - 74 Up to £5,824 Have a right to join No *SPA – State Pension Age
  14. 14. 14 • Assessments will need to be conducted each pay period • Recorded and evidenced • Correct contributions deducted • Pension reports sent to pension supplier • Statutory communications sent to workers AT YOUR STAGING DATE - INITIAL COMPLIANCE DUTIES
  15. 15. AT YOUR STAGING DATE - COMMUNICATIONS TO WORKERS 15 • Statutory assessment outcome communications - Enrolment notice - General notice - Postponement notice • Enrolment pack from pension supplier with opt-out instructions
  16. 16. POST STAGING DATE – ONGOING EMPLOYER DUTIES 16 • Completion of your declaration of compliance • Delivery of new joiner process • Managing opt-in and opt-out requests Communications will need to be issued when: - New employees join the payroll - Employees on the payroll turn 22 and become eligible - Employees whose earnings increase due to a pay spike
  17. 17. POST STAGING DATE - FUTURE GOVERNANCE AND OVERSIGHT 17 • Annual review of the pension scheme • Re-enrolment • Triennial Declaration of Compliance
  18. 18. 18 Background and the story so far Overview of AE duties and key employer decisions AE in practice and managing employer duties Questions and answers SUMMARY
  19. 19. WHERE CAN YOU GET MORE INFORMATION 19 Lucas Fettes auto-enrolment helpline – 0345 357 8910 http://www.easyasae.co.uk
  20. 20. Andrew Campbell Andrew.Campbell@lucasfettes.co.uk Emma Welling Emma.Welling@lucasfettes.co.uk

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