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Scottish Life We’re going through chAEnges… For Professional Advisers Only.

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Presentation on theme: "Scottish Life We’re going through chAEnges… For Professional Advisers Only."— Presentation transcript:

1 Scottish Life We’re going through chAEnges… For Professional Advisers Only

2  Know the technical changes affecting auto enrolment  Have an understanding of the main changes affecting the workplace pensions market  Understand how these changes could impact on your business Learning outcomes

3 Source: DWP: Better workplace pensions: Further measures for savers, March 2014

4 Minimum quality standards Charge capDeferred Member PenaltiesActive Member DiscountsTransparencyScaleCommissions Source: DWP: Better workplace pensions: Further measures for savers, March 2014

5 Scottish Life Commission & Consultancy Charging (CC)

6 Commission and CC ban: Timeline March 2014 DWP Command paper published April 2015 Consultancy charging banned April 2016 Commission banned Source: DWP: Better workplace pensions: Further measures for savers, March 2014

7 Adviser Charging and AE schemes Adviser charging can be used Individual advice and normal client agreement required Adviser charging can be used Individual advice and normal client agreement required Are workers paying for advice to the employer? Is AC paid for workers automatically enrolled? Unlikely that provider will allow this Unlikely that FCA / TPR will like this...DWP can legislate Unlikely that provider will allow this Unlikely that FCA / TPR will like this...DWP can legislate 

8 Adviser Charging and AE schemes Adviser charging NOT banned Normal client agreement required Adviser charging NOT banned Normal client agreement required Individual advice AFTER automatic enrolment Individual advice for transfers Don’t try and replicate commission/consultancy charging through adviser charging

9 Question 1 How many of your client will be affected by this? a)<5 b) c) d)>25

10 Scottish Life Limited Liability Partnerships (LLPs)

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12 Are members of an LLP “ workers”? “The immediately striking thing about this case is how much hard work has to be done in order to find that a member of an LLP is not a worker...” Lady Hale Source: The Supreme Court, JUDGMENT, Clyde & Co LLP and another (Respondents) v Bates van Winkelhof (Appellant)

13 Limited Liability Partnerships (LLPs) “Our view is that an LLP should assume that the Supreme Court’s decision is equally applicable and as such, members of an LLP could be considered workers for automatic enrolment.” Source: The Pensions Regulator, Automatic enrolment Compliance and enforcement Quarterly bulletin, April-June 2014 “This ruling applies retrospectively.”

14 Limited Liability Partnerships (LLPs) Check TPR guidance, and consider: Integration within the organisation Dependence/subordination, and Exclusivity (ie could the individual provide services to anyone else). Source: The Pensions Regulator, Automatic enrolment Compliance and enforcement Quarterly bulletin, April-June 2014 Employers in doubt should seek legal advice!

15 Question 2 Do you have any clients who will be impacted by the change in worker definition? a)Yes, individual clients b)Yes, corporate clients c)Both d)None

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17 Pot follows member “Federated” model Pension Scheme Pension Scheme Pension Scheme Pension Scheme Option to opt out AFTER AE Data Handler Transfer House

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19 A new definition of pension scheme: Pension Schemes Bill Defined Benefit FULL pensions promise Defined Benefit FULL pensions promise Defined Contribution NO pensions promise Defined Contribution NO pensions promise Shared Risk Scheme PARTIAL pensions promise Shared Risk Scheme PARTIAL pensions promise High Employer Risk High Employee Risk Collective Benefits Schemes Employer Cost

20 Shared Risk Scheme (SRS) Models Accumulation Decumulation Money Back Capital & investment Retirement income insurance Retirement income builder

21 Collective Benefit Schemes (CBSs) DC G’TEE ? Industry/union wide Aspirational benefit Guaranteed benefit Conditional indexation Conditional benefits above any guarantee Source: Department for Work and Pensions, Reshaping workplace pensions for future generations, June 2014

22 Scottish Life Who’s afraid of TPR?

23 Key findings – July 2012 to September ,660 registrations 19,135,000 total workers 19,135,000 total workers 4,748,000 eligible jobholders 4,748,000 eligible jobholders Source: The Pensions Regulator, Automatic enrolment monthly declaration of compliance, October 2014

24 Compliance notice Information notice Fixed penalty notice Unpaid cont. notice Inspection Source: The Pensions Regulator, Automatic enrolment compliance and enforcement, 1 July – 30 September 2014 Use of formal powers – July 2012 – Sept 2014 (Selected powers used in the period) 6

25 Staging volumes by quarter Excluding new employers Sources: The Pensions Regulator, “Employer staging forecast”, January 2014 NEST insight report , , , ,000

26 Market reaction... Providers are re-pricing and/or moving to a dual charging structure More ‘plug-n-play’, streamlined AE solutions will come to market to deal with capacity Payroll might become the primary source of AE software – providers will need to introduce integrated, seamless data solutions Possible secondary market created by: First re-enrolment dates in 2015 Failure of AE systems Schemes being re-priced Providers/advisers exiting market

27 Action points Existing schemes: What is the charge? Are active member discounts in place? What commission is being taken? Do you have clients affected by the definition of worker? Plan ahead Contact Scottish Life:

28 Question 3 Would you like more information on a)The changes affecting AMDs, commission and charges b) How Scottish Life can assist you with designing an AE solution for your client c) All of the above d) None of the above

29 INTRODUCING OUR NEW BRAND

30 A FEW WORDS ABOUT OUR Scottish Life is rebranding to Royal London. Our name may be changing, but the same outstanding products, values and service teams will remain. We’re as committed to advisers as ever. REBRAND

31 KEY DATES New Royal London brand unveiled Nationwide, TV, press and outdoor advertising Cricket sponsorship starts MAY Ongoing communications with advisers and employers about our rebrand JUNE / JULY Ongoing customer comms starting from Aug AUGUST Scottish Life rebrands to Royal London. NOVEMBER

32 32 We look forward to doing business with you for many years to come – as Royal London.

33 THANK YOU The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The firm is on the Financial Services Register, registration number It provides life assurance and pensions and is a member of the Association of British Insurers and the Association of Financial Mutuals. Registered in England and Wales number Registered office: 55 Gracechurch Street, London EC3V 0RL. Royal London Marketing Limited is authorised and regulated by the Financial Conduct Authority and introduces Royal London’s customers to other insurance companies. The firm is on the Financial Services Register, registration number Registered in England and Wales number Registered office: 55 Gracechurch Street, London EC3V 0RL. Royal London Corporate Pension Services Limited is authorised and regulated by the Financial Conduct Authority and provides pension services. The firm is on the Financial Services Register, registration number Registered in England and Wales number Registered office: 55 Gracechurch Street, London EC3V 0RL. 44PR0905 June 14

34 The information provided is based on our current understanding of the relevant legislation and regulation and may be subject to alteration as a result of changes in legislation and practice as well as the circumstances of the individual. The figures shown in any case studies are examples only, and while they highlight some of the opportunities for planning, it should be recognised that they are not an exhaustive description of the opportunities or pitfalls. Important information Scottish Life is a division of the Royal London Group which consists of the Royal London Mutual Insurance Society Limited and its subsidiaries. The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The firm is on the Financial Services Register, registration number It provides life assurance and pensions and is a member of the Association of British Insurers and the Association of Financial Mutuals. Registered in England and Wales number Registered office: 55 Gracechurch Street, London, EC3V 0RL. Royal London Marketing Limited is authorised and regulated by the Financial Conduct Authority and introduces Royal London’s customers to other insurance companies. The firm is on the Financial Services Register, registration number Registered in England and Wales number Registered office: 55 Gracechurch Street, London, EC3V 0RL. Royal London Corporate Pension Services Limited is authorised and regulated by the Financial Conduct Authority and provides pension services. The firm is on the Financial Services Register, registration number Registered in England and Wales number Registered office: 55 Gracechurch Street, London, EC3V 0RL. October TPR0951


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