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Openworks client presentation
- 1. Auto Enrolment in 2015
- 2. What we will cover • What is auto enrolment • Who are Johnson Fleming • Market developments • The regulator gets tough • The solution(s) • Next steps
- 5. Customer service: Excellence comes as standard
- 6. Tried, tested & proven….. • Combined pensions experience of 65 years • Staged over 75,000 employees • Completed over 700,000 assessments • Sent over 126,000 auto-enrolment communications
- 7. When do I stage? If you don't know your PAYE reference, it can be found on a P6/P9 coding notice or on your white payslip booklet P30BC. If you don't pay your staff through a PAYE scheme, your staging date will be 1 April 2017. Step 1: Enter your PAYE reference: • Tip: An example of a PAYE reference is 913 / WZ5121A. In this example you'd enter '913' and 'WZ5121A'. Take care not to confuse numbers with letters; zero and the letter 'O' look very similar! Step 2: Enter the words/digits displayed below and then select 'Show my staging date'
- 8. 32 new employer responsibilities 1. Employer duties and defining the workforce 2. Getting ready 3. Assessing the workforce • Postponement • Transitional period for DB and hybrid • Having completed the assessment 4. Pension schemes 5. Automatic enrolment process 6. Opting in, joining and contractual enrolment 7. Opting out 8. Safeguarding individuals 9. Keeping records 10. Information to workers 11. 11. Automatic re-enrolment
- 10. Over 70 items to address before, at and after your staging date On the Openwork adviser hub
- 11. Obligation – Who to enrol 7 makecontributions qualifyingscheme nage. s’. f £10,000 applies devery year by workersif they ask s,alsoknown non-eligible etomake ifyingearnings, Earningsfrom £10,000 Eligible jobholder Earningsbetween £5,824 and £10,000 Non-eligible jobholders Earningsup to £5,824 Workerswithout qualifyingearnings Earningsbetween £5,824 and £10,000 Non-eligible jobholder Age22 toStatePensionage Age16-22 orStatePensionage- 75 Earningsup to £5,824 Workerswithout qualifyingearnings
- 12. Obligations – how much to contribute Oct 2012 Oct 2017 Oct 2018 onwards 2.4 per cent worker 2 per cent worker 0.6 per cent tax relief 1 per cent tax relief 4 per cent worker 3 per cent worker 0.2 per cent tax relief 1 per cent worker 0.8 per cent worker 9% 8% 7% 6% 5% 4% 3% 2% 1% 0%
- 13. Obligation – assessing the workforce Month 1 Month 4Month 3Month 2 Month 5 Month 6 £ W A G E S Basic Basic Basic Basic Basic Basic £833
- 14. Obligation – assessing the workforce Month 1 Month 4Month 3Month 2 Month 5 Month 6 £ W A G E S Basic Basic Basic Basic Basic Basic
- 15. Obligation- enroll employees into a qualifying scheme
- 16. What about NEST? • Does not fulfill employers obligations • Charges • Restrictions • Investment • Flexibility • Government financed not endorsed
- 17. Qualifying Workplace Pension Scheme
- 18. Why are we doing this?
- 19. Meet Average Joe He is 35 and intends to retire at 65 Earning national average earnings £25,000 (assumes salary uplift 1.5%)
- 20. Due to auto-enrolment Joe’s & his employer will contribute £59,821.64 Assumes 8% contributions for 30 years
- 21. …and with a bit of growth (3.5%) £102,567
- 22. …and Joe works with 20 others £2,000,000 +
- 23. You are not alone 2012 – 2014/15 43,538 2015/16 152,900 2016/17 617,000 2017/18 533,00
- 24. The next 12 months April - June October - December January – March 16 15,000 110,000 2016/17 617,000
- 25. The scale in perspective 1960-2014 2015 alone
- 26. The impact on your business Administration Distribution Processes Staffing Infrastructure
- 27. The Pensions Regulator is flexing its muscles… 2437 investigations 58% contained breaches
- 28. A change of approach … you have been warned!
- 29. The Pensions Regulator is flexing its muscles… £400 statutory notice…….. Now issued escalating fines from £50 - £10,000 PER DAY!
- 30. The cost of getting it wrong £1,000’s And that’s without fines ……
- 31. Over 70 items to address before, at and after your staging date
- 32. The burden TIME CAPABILITY RISK
- 33. What is your key driver?
- 34. Solution. ‘become your clients lifeline’
- 35. Managed auto-enrolment service What’s included: • Project management • Data validation • Assessment & categorisation • Communications • Opt out & in • Update payroll & provider • Register • Audit and record keeping
- 36. Supported auto-enrolment service What’s included: • Project management • Data validation • Assessment & categorisation • Communications • Opt out & in • Partial record keeping • Audit
- 37. Initial set up £1,075 Ongoing administration MAES From £195+ vat per month SAES From £ 2.00 + vat Per member per month
- 38. Not all are created equal…….
- 39. My accountant will do it for me Auto enrolment delivery Technology drivers Advisory drivers
- 40. …but as long as its qualifying
- 42. Not every scheme is the same…..if you haven’t asked
- 43. Its not just for large funds 35%
- 44. Contribution options Contributions for net salary Contributions via salary sacrifice Contributions from gross pay
- 45. Tax relief: non tax payer £ 960 £960 20% Tax added automatically (£6,720)
- 46. How can one size fits all be the right answer?
- 47. History has a habit of repeating itself Pensions have long been judged by this process… and you are making a pension decision
- 49. If its not written down…. • What research was conducted? • What options were considered? • Which were discounted and why?
- 50. If its not written down…. • How the scheme fits the needs of the employer and workforce?
- 51. • Gives you all the info they need • Allows you to sign up to each service • Updated frequently www.johnsonfleming.com/openwork-client
- 52. The user experience • This pdf is on the right hand side of the client facing site
- 53. When should I start? • No need to wait till staging! • Secure the resource • Spread the cost Don’t delay - Speak to your adviser today
- 54. Staff pressure In time, enough people who pay into the pensions (the staff) will start asking some questions about where their money is going.
- 55. Financial impact Decisions will come under scrutiny including those who influenced them… …and those who seek to empower employees to obtain restitution abound. 2
- 56. Questions? Ladies and gentleman thank you for listening
- 57. THIS DOCUMENT IS CONFIDENTIAL and intended solely for the use of the individual to whom it is addressed or any other recipient expressly authorised by Johnson Fleming Limited, in writing or otherwise, to receive the same. If you are not the addressee or authorised recipient of this document, any disclosure, reproduction, copying, distribution, or other dissemination or use of this communication is strictly prohibited. Past performance is not a guide to the future. Potential for profit is accompanied by the possibility of loss. The value of investment funds and the income from them may go down as well as up and investors may not get back the original amount invested. The content of this presentation is for information purposes, it does not represent personal financial advice and is not recommendation that contributions to the Group Personal Pension Plan will meet all of your future financial requirements for retirement. If you have any doubts as to whether the content of this presentation meets your personal needs you should seek independent financial advice. Johnson Fleming has joined alliances with specialist business associates who are able to provide personal advice, at your request. These carefully selected business partners reserve the right to charge a fee for these services which would be agreed in advance before they undertake any work on your behalf. Johnson Fleming Group Limited is authorised as a Firm of Financial Advisers and our permitted business activity is advising and arranging life insurance, pensions, investments and general insurance contracts. Johnson Fleming Group Limited is authorised and regulated by the Financial Conduct Authority (FCA Register number 599255, see http://www.fca.org.uk/register for registration details) and registered in England and Wales No 06272390. Johnson Fleming Limited (FCA 215110), Johnson Fleming Administration Services Limited (FCA 480883) and Johnson Fleming Services Limited (FCA 606750) are Appointed Representatives of Johnson Fleming Group Limited. Registered Office: Johnson Fleming Group Limited, Fleming House, Bromsgrove Enterprise Park, Bromsgrove B60 3AL. JFXXXXXX Important information
Editor's Notes
- If the number of calls we are receiving from Openwork advisers is anything to go by we are going to be in for a really busy year in 2015. Over the next few slides I will consider what the market looks like and the experiences we have seen to date.
- Pensions industry professionals with combined pension history of over 65 years in our consultants Forefront of auto-enrolment Staged over 40,000 employees Sent over 60,000 auto-enrolment communications Enrolled 29 of our clients Client information
- Current obligations in terms of contributions. You will need to deduct 1% from the employee and you would need to pay 1% (which consists of 0.8% from yourself and 0.2% tax relief. This will go up in stages in October 2017 and then October 2018. You may pay more than the statutory minimums, you may also pay different contribution levels for different staff. You could also utilise this an a retention tool as an employee benefit. You may also want to consider the use of Salary Sacrifice, which will assist you to capture national insurance savings for the employee and employer. If you utilise this option, once you get to 2018, the savings that you have made as a result can go a long way to pay for the cost of running your AE administration We can provide you with the report for you that will take you through the savings, benefits and how to set up an HMRC qualifying salary sacrifice arrangement. The cost of that service is £630.00
- YOU HAVE A STATUORY OBLIGATION TO ENROLL ELIGIBLE WORKERS INTO A QUALIFYING WORK PLACE PENSION SCHEME. Do you have an existing pension scheme? – you have hopefully already established this! If so, have you checked whether the scheme is a qualifying scheme? If the scheme is qualifying, have you checked that the current provider whether they will change their terms to become qualifying scheme for the different AE population? The criteria the scheme needs to meet in terms of auto enrolment: Qualifying Charges under the charge cap of 0.75% Default Fund No barriers to entry
- If you do not have a qualifying scheme, we can help you. we have obtained preferential terms and rates from leading providers to enable us to offer a solution to meet everyones needs. we will look at your profile as an employer and assess your needs. From that we will source and set up the most appropriate scheme for you. That will be supported by a full recommendation report as to why the scheme was selected and how it best fits your needs. So what that means to you, is that you have a full report detailing as to why the scheme was chosen and how it met your needs in case you are ever asked why it was chosen
- 2012 – 2014 So from inception to the end of 2014 some 43,538 of the largest employers staged covering almost 20m workers 2015 – This year alone the number staging increases to 145,000 2016 – and then it simply gets silly!
- The difference here is time and risk What does your time cost? Providers and other solutions will be based on a cost but you carry the cost of delivery (time) plus the risk of doing correctly. Your time is not free…. The difference between the two is how long it takes you to run and the time cost to you plus an element of insurance that you have transferred the risk to someone else. It’s a bit like conveyencing, you can do it yourself online but most people still choose a solicitor
- As we looked at how many small employers will be entering the auto enrolment process as well as the larger employers returning to the market to find a correct solution, creates a huge supply and demand factor. You do not need to wait, the Pensions Regulator recommends at least a 12 month period before staging date to adequately prepare for Auto enrolment. You do not want to wait until the last moment, similar to shopping on Christmas eve at 23:58 and having to take whatever is there. It needs to be planned and managed. You are also able to spread the cost if you start earlier.