1. Automatic enrolment Supporting you every step of the way Presented by Simon Taylor | Pearson Hinchliffe Pensions Specialist

2. ■ Background to reform ■ Employer action plan: − What they need to do? − When they need to do it? − Who must they do it for? − How will they do it?  Choosing a pension scheme Contents Do I need to do it? How much will it cost? Any way out?

3. The Employer Duties For professional advisers only

4. Automatic enrolment & the new employer duties “The employer must make prescribed arrangements by which the jobholder becomes an active member of an automatic enrolment scheme...” The Pensions Act 2008 Section 3(2) Source: Pensions Act 2008, Office Of Public Sector Information – www.opsi.gov.uk.

5. TPR 7-step checklist 7. Contribute to your workers’ pensions 6. Register with the Pensions Regulator and keep records 5. Automatically enrol your ‘eligible jobholders’ 4. Communicate the changes to all your workers 3. Review your pension arrangements 2. Assess your workforce 1. Know your staging date – when to act

6. For professional advisers only The rules

7. How much do I have to pay?  Defined Contribution – will be phased in to: 8% ‘Qualifying Earnings’ total 3% ‘Qualifying Earnings’ employer minimum Jobholder can be required to make up the difference  ‘Qualifying Earnings’  Between £5,564 - £42,475*  Includes overtime, SSP, SMP etc * Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2012

8. Admin duties Employers MUSTEmployers MUST NOT Auto enrol and re-enrol/deduct payments Register/re-register their scheme Provide information to eligible and non- eligible jobholders Provide information to scheme/provider Process opt outs/make refunds Keep records Discourage membership Give jobholders the opt-out form Encourage opt-outs Use ‘Prohibited recruitment conduct’ Give advice Sources: Pensions Act 2008, The Occupational and Personal Pension Schemes (Automatic Enrolment) Regulations 2010.

9. Or else... Compliance/unpaid contribution notice Stage 1 - Warning Fixed penalty - £400 Stage 2 – ‘Wake up call’ Escalating penalty WorkersPenalty per day 1-4 £50 5-49 £500 50-249£2,500 250-499£5,000 500+£10,000 Escalating penalty WorkersPenalty per day 1-4 £50 5-49 £500 50-249£2,500 250-499£5,000 500+£10,000 Stage 3 – Persistent offenders Sources: Pensions Act 2008, Chapter 2, The Occupational and Personal Pension Schemes (Automatic Enrolment) Regulations 2010. For professional advisers only

10. Doing nothing is not an option... “A person guilty of an offence under this section is liable - a)on conviction on indictment, to imprisonment for a term not exceeding two years, or to a fine, or both; b)on summary conviction to a fine not exceeding the statutory maximum.” The Pensions Act 2008, Section 45(2) Source: Pensions Act 2008, Office Of Public Sector Information – www.opsi.gov.uk.

11. Employer choice: Automatic Enrolment Schemes Automatic Enrolment Scheme Private Scheme Private Scheme NOW: Pensions 1 The People’s Pension 2 1 NOW:Pensions, marketed by ATP 2 The People’s Pension, marketed by B&CE

12. What people think: About NEST plus 1.8% contribution charge Government run Cheaper than a private scheme 1 2012/13 terms 0.3% amc One size fits all Maximum contribution £4,400 1 Limited investment choice No transfers in or out No trustee discretion on death What it is:

13. Employer Less admin Added extras Employer Less admin Added extras Provider Adviser Auto-enrolment system Building on NEST Staff appreciation Competitive edge Adviser Investment advice Scheme design Auto-enrolment Certification Ongoing reviews Adviser Investment advice Scheme design Auto-enrolment Certification Ongoing reviews Provider Investment options Technical support Implementation support Benefits admin. platform Member communications Provider Investment options Technical support Implementation support Benefits admin. platform Member communications Benefits systems HR systems

14. For professional advisers only Summary Step 1 – Design a solution Step 2 – Implement the changes effectively Step 3 – Run the scheme in the most efficient way

15. Scottish Life Thank You Any Questions? Contact Me: Simon Taylor 0161 785 3508 simon.taylor@phsolicitors.co.uk