Independent Financial Adviser Milner Boardman Financial Strategies Ltd Welcome Auto Enrolment A Payroll/Admin Problem OR a Pension Problem? Today’s Agenda •Employers Duties •Employees Affected •Help Available •Non Compliance •Next Steps • • • • • • • • • • Employers duties Assess your Workforce Identify your eligible employees that must be Automatically Enrolled Choose a suitable qualifying pension scheme Register the pension scheme with the Pensions Regulator Make appropriate contributions Process any 'Opt-Out' notices Process any 'Opt-In' or joining requests Ensure that the process is free of inducements and prohibited activity Keep accurate records Ensure that all workers are provided with information about the changes Employers Duties continued • Put into a qualifying scheme non-eligible jobholders who decide to opt in • Those employees who are not entitled to be auto-enrolled must be given the opportunity to join a scheme • Advise all those who have been automatically enrolled have the right to opt out but not to be seen to inducing employees not to join • Refund contributions to those who have decided to opt out • Re-register the scheme every three years Employer Duties Employers MUST NOT •Offer advice •Discourage membership •Give jobholders the opt-out form •Encourage opt-outs •Use ‘Prohibited recruitment conduct’ Which Employees • Entitled on less than £5668 Not auto enrolled, but can choose to join , employer does not have to contribute (aged between 16-74) • Non Eligible Jobholder £5668 - £9440 Not auto enrolled but have right to opt in and if they Employer must contribute (aged between 16-21 or SPA-74) • Eligible jobholder (aged between 22-SPA) £9440 + Auto enrolled Contribution Levels? • Self Certification – employers choice! • Pensionable Pay = acceptable definitions!!! Minimum 9% with 4% from Employer Minimum 8% with 3% from Employer provided at least 85% of total pay is pensionable Minimum 7% with 3% from Employer provided that 100% of total pay is pensionable You couldn’t make it up could you?? How big is the Problem? Staging Date Scheme Size No of Employers Nov 2012 Nov 2013 Nov 2014 Oct 2015 Oct 2016 April 2017 50 -120,000 500 - 799 59 30 - 39 Fewer than 30 Fewer than 30 up to 50 2,000 – 3,000 600 - 700 14,800 – 14,900 65,300- 65,200 98,100 – 98,200 Employers receive letter 12 months before staging date explaining their duties! Components Choose the Right Middleware •Complies with all the regulations •Will automatically adapt as and when the regulations change •Can be adapted to meet a client specific interpretation of the regulations – E.g new employee joins day after payroll cut-off date •Provides the regulatory reports that tPR requires •Integrates with tPR •Handles the certification process •Handles postponement features •Handles postponement features at either a client, scheme, scheme section and/or member level •Ensures that employers cannot opt out employees •Can support any type of pension scheme •Can support multiple different types of pension scheme within the same AE arrangement •Already handles complex pensions and benefits schemes •Supports multiple roles, permissions and authorisation groups •Supports sectionalised schemes •Supports multiple definitions of pensionable salary •Supports multiple payroll periods and pay structures •Supports salary sacrifice •Supports tiered contribution structures •Supports any pension provider •Supports master trusts e.g NEST, NOW Pensions, People’s Pension •Supports all payroll providers • Supports multiple sources of data and supports any data import format • Supports the extract of data into any format for payroll or pension provider • Can handle missing or temporary NI numbers • Supports pro-rata costs for individuals that join mid-month • Can switch on and off elements of the solution provided by a third party e.g payroll provider only assesses the workforce • Can set up rules to hold instructions for a specific period of time E.g until the end of an opt-out period if a payroll can only be manually updated – by holding on to information minimise change on the payroll system • Provides a tool to ensure compliance with scheme assessment rules • Provides a tool to ensure correct categorisation of employees into the right definition of worker • Provides a tool to ensure correct categorisation of employees into the right definition of jobholder • Provides the flexibility to run assessments when appropriate • Provides the ability to run assessments automatically, manually or a combination of both • Supports employees with fluctuating emoluments • Supports temporary and contract workers • Handle changing pay periods by individual and correctly assess against them e.g shorter pay period at Christmas • Automatically produces comms materials specified in the regulations e.g preassessment, assessment, post assessment • Can produce hard copy or electronic communication • Can brand the comms materials • Can give the employer the ability to change the comms materials • Can attach documentation to member records e.g opt-out forms • Gives employees the ability to print out documents • Can issue automated reminders to alert about key processes • Can issue the alerts by SMS • Gives employees online access • Gives employees the ability to opt-in and opt-out online • Gives the option to integrate auto-enrolment with total reward and flexible benefits • Provides real time integration with pension providers • Supports single sign-on to external applications •Provides access to all the information tPR will require •Provides an audit trail of all data changes •Holds audit data in perpetuity •Provides easy online access to all audit data •Supports the creation of ad-hoc reports from any data in the system •Will keep the system automatically updated as regulations change Establish benefits for staff -previously set up by BIG employers • Child Care Vouchers • Bikes to Work • Health Cash Plan • Private Medical Insurance • Dental Scheme • Life Cover Salary Exchange brings National Insurance savings for employers Current Myths • Auto enrolment is too far away to need to consider now – TPR say you need to start planning at least a of 12 months before your staging date • It won’t happen – Its already started for the VERY BIG employers! • Employers won’t really get fined, it’s just Stakeholder Part TPR know every staging date & will interrogate HMRC records • Employers don’t have the money to auto enrol their staff into a pension scheme – they need to find it from somewhere! • Providers will provide solutions – they only want BIG schemes TP.R Fines • Stage 1= Warning from TPR • Stage = Wake-Up call –Fixed penalty £400 • Stage = Fines for persistent offenders • 1-4 Employees £50 per day • 5-49 Employees £500 per day • 50-249 Employees £2500 per day • 250-499 Employees £5000 per day • 500+ £10,000 per day (Backdated to your Staging Date) Auto Enrolment A Payroll/Admin Problem NOT a Pension Problem! Questions?