A guide and 7 point plan to enable employers to comply with the new Workplace Pensions and Auto-Enrolment. Know your staging dates, what to do next, how to plan for Auto-Enrolment and how to get employees on board.

1. Workplace Pensions
All in.. but into what exactly ??
Your 7 Point Plan
How to comply
Make it work for your business
Avoid big penalties
Get staff on side
Richard Mullett
Richard.Mullett@TheLegalPartners.com
EMPLOYMENT & BUSINESS LAWYERS
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0208 334 8049
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2. Pension Auto-Enrolment = Workplace Pensions
1 How your business is affected
2 7 Point Plan
3 Battle Stories & Practical Tips
4 Fixed Price services
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3. Pension Contributions
Gross earnings: Salary,
Commission, Bonus,
Overtime, Sick Pay,
Statutory Maternity Pay
between £5,668 and
£41,450
Date
Employer
minimum
contribution
Total
minimum
contribution
Employer's staging date
to 30 September 2017
1%
2%
October 2017 to
30 September 2018
2%
5%
1 October 2018 onwards
3%
8%
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4. Cebr - £15bn cost over next 5 years
Centre for Economics Business Research
Pension contributions: £11.6 billion over next 5 years.
Set-up costs: average:
£8,900 for small businesses (4 or less employees)
£12,600 for SMEs.
Planning & Preparation time: "up to 103 man days"
Ongoing administration tasks: upto 3 days a month for
some companies.
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5. 7 Point Plan – 9 Months
1 Know your Staging Date & Nominate a Contact
2 Assess Your Workforce & Develop a Plan
3 Review Pension Plans, Employment Contracts and Staff
Handbooks & Select Advisers
4 Communicate to your workers
5 Automatically enrol “eligible jobholders”
6 Register with the Pensions Regulator & keep records
7 Contribute to your worker’s scheme
+ what also to do
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6. 1 Know your Staging Date & Nominate a
Contact
Employer Size
Enrolment Date
250+
50 to 249+
30 to 49 members
Less than 30
Remaining & New employers
1 Oct 2012 to 1 Feb 2014
1 April 2014 to 1 April 2015
1 August 2015 to 1 Oct 2015
1 Jan 2016 to 1 April 2017
1 April 2017 onwards
Postpone Start for 3 Months but ..staff can ask to opt in during this 3 month period
HMRC records. Do not assume correct!
Go to http://www.thepensionsregulator.gov.uk/employers/tools/staging-date.aspx.
Nominated Contact gets reminders from the Pensions Regulator to stay on track!
Get your business registered!
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7. 2 Assess Your Workforce & Develop a Plan
Look at who is:
eligible £9,440 per year “Eligible Salary” = auto enrol + 1%
employer & 2% employee pension contribution
non-eligible – may opt in & enrol + 1% employer & 2%
employee pension contribution
not eligible – right to join but no right to employer contribution
Work out likely employer contributions:
Involve CEO & CFO, HR, Accountants and Lawyers
Cashflow planning & Set up and running budget
HR Communication at the right time of year
Register on line – start the process. Avoid last minute rush
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8. Over 90% - Stay In
Over 90 per cent of people who have been
placed into a workplace pension by their
employer are staying in.
Department for Work and Pensions (DWP) 8
August 2013
50 biggest employers - on average just 9% opt
out. Previously: DWP research showed 30%
were likely to opt out.
Why? More under 30s staying in a pension
scheme than other age groups.
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9. 3 Select Advisers, Review Pension Plans,
Employment Contracts & Staff Handbooks
Who is a worker? Employees (full & part-time
etc), Contractors, Agency staff?
If workers are eligible, you need a pension plan
Use existing pension plan?
If it complies use it
If not – need new scheme
Give a copy of new pension scheme to workers
Change employment contracts & Staff
Handbooks
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10. 4 Communicate to your workers
Raise awareness – newsletters, posters
Regular communication
Less take home salary but pension benefit
Write 1 month before implementation date –
minimum!
Template letters
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11. 5 Automatically enrol “eligible
jobholders”
At the Staging Date – double check who
automatically enrols & who could opt in. 1
month to enrol.
Give pension scheme provider all the details so
the pension scheme makes the investments.
Start making 1% monthly contributions
No inducements allowed to opt out. Breach of the
law.
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12. 6 Register with the Pensions
Regulator & keep records
4 months from the Staging Date
Notify:
the name of the pension scheme provider +
unique Employer Pension Scheme Reference
No or NEST ID
How many workers and how many enrolled
CEO details
Get Government Gateway ID code & unique letter
code from the Pensions Regulator
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13. Keep Records
Staff & pension scheme:
names and addresses of staff automatically enrolled
contributions payable to the pension scheme and when
they were paid
any opt-in or opt-out notices you receive
name and address of the pension scheme
employer pension scheme reference or pension
scheme registry number.
Storage and Access
Good governance and proof of compliance with your
duties.
Keep for 6 years
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14. 7 Contribute to your worker’s scheme
Deduct and pay regular contributions
Process Opt outs
Processing opt ins
Processing opt-in requests
Regularly monitor ages and earnings as this
affects workers
Pay rises
Joiners & Leavers
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15. Battle Stories & Practical Tips
What not to do v What to do
1 Check with Payroll & Pension providers - plan and get costings
and select right supplier
2 Test – dummy run 3 months before with named Directors
3 Do not think that postponing by 3 months solves all the issues.
4 Use the 3 month waiting period before new joiners enter to
your advantage (eg after 3 month probationary period).
5 Communicate with the workers!
6 Correct Staff records. Format data for pension provider.
7 Look out for 25 Nov 13 Automatic enrolment: annual
evaluation report & Government campaigns – this will raise
awareness even more!
8 Pension Providers & NEST – pros and cons. Cost effective
automated solution.
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16. HR & Employment & Business Law Issues
Existing workers
Changing Employment Contracts – it’s a package. Sell the
benefits.
Staff Handbooks
Outsourcing
Contracts with Advisers & New Pension Providers
New & Existing Payroll Providers – new contract & SLA.
Payroll staff & TUPE
Hiring New Workers
What you can say and not say
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17. Fixed Price Services
Review Your Plan
Review / Negotiate New Contracts with Advisers,
Pension Providers & Payroll Providers
Assess which workers qualify
Review Employment Contracts & Staff
Handbooks and best way to communicate
Training
Template Letters
Be there to help
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18. Enforcement & Penalties!
Non-statutory action
Guidance and instruction. Warning letter confirming a set time frame for
compliance with the law
Statutory notices
Statutory notices to make business comply with the law and / or pay any
missed or late contributions + interest.
Penalty notices
A fixed penalty notice: £400
Escalating penalty notice for failure to comply with a statutory notice:
£50 to £10,000 per day depending upon the number of workers.
Fail to pay contributions due: up to £5,000 for individuals and up to
£50,000 for organisations.
Fail to comply with a compliance notice/breach of the law: prohibited
recruitment conduct penalty notice: £5,000 for businesses with over
250 staff.
Court action: Pension Regulator
“We aim to fully recover all the penalties that we issue.”
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19. In summary
Tell your CEO/CFO and plan now with your HR Team
Engage your advisers
Join us for our HR Forums in 2014: follow @thelegalpartner
CONTACT RICHARD.MULLETT@THELEGALPARTNERS.COM
T: 0208 334 8049
Take Advice
from
The Legal Partners
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