Workplace pensions are becoming more important due to an aging population and declining pension savings rates. The UK government is implementing auto-enrollment of eligible employees into qualifying workplace pension schemes to address this issue. Employers will be legally obligated to automatically enroll eligible employees and contribute a minimum of 3% to the pension. This will take effect between 2012-2018 based on company size. Employers need to understand their auto-enrollment obligations and dates, ensure their current scheme qualifies, and prepare for changes to payroll and communications with employees.

1. Workplace pensions and your
role as employers
ECC Breakfast Connections
Stephen Ingledew
Managing Director, Corporate
25 April 2012

2. Why are workplace pensions on the agenda?
• Number of pensioners will rise by half a million in 20 years
• Pension saving amongst employees is at an all time low
• Life expectancy is increasing rapidly
Source – Annual Survey of Hours and Earnings (ASHE) 2011

3. However, workplace pensions are under-utilised…
• Over 1 million employers don’t have a workplace pension scheme
• Up to 10 million people are not saving into any pension scheme
• 35% of private sector employees are currently saving into a pension
• Many people on average salaries will retire with low incomes
Source: Standard Life 2011 report ‘Keep on nudging’

4. Government reform of workplace pensions will mean…
• Auto-enrolment of employees
• Employers must put in place a qualifying workplace pension scheme
• Legal obligation to join eligible employees and re-enrol every three years
• Ongoing governance and compliance requirement
• Minimum contributions will be 8% of band earnings (3% from employer)

5. Research suggests this could work well…
82% 33%
remain enrolled would pay more
Source: Standard Life 2011 report ‘Keep on nudging’

6. So what does this mean for employers…
Auto-enrolment start dates
Q2 2014
Q4 2012 Q1-Q2 2013 Q3-Q4 2013 Q1 2014 Q3 2015 -
- Q2 2015
>5000 4000-4999 500-3999 250- 50-249 <50
ontribution rates:
012-2017 = 1% employer and 1% employee
017-2018 = 2% employer and 3% employee
Source: Department of work and pensions

7. Who’s here to help…
• DWP
• The Pensions Regulator
• Pension providers
• NEST
• Advisers

8. Technology will ease the burden…

9. The questions you need to consider…
When is your auto-enrolment date?
Does your current scheme qualify?
Do changes need to be made to payroll?
Are there trustees you need to consult with?
How many people will become eligible, and at what cost?
How are you going to communicate with your employees?
How will your employees respond…

10. Questions
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Edinburgh EH1 2DH.
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