1. Auto Enrolment The Employer’s Duties

2. Automatic Enrolment Automatic Enrolment is as much about processes and compliance as it is about the pension scheme employees will be enrolled into.

3. Automatic Enrolment Employers will be required to auto enrol eligible job holders in a rolling programme of “Staging Dates” from 1 st October 2012 for the largest employers to 1 st April 2017 for smaller employers. Employees can opt out after they have been auto enrolled but employers cannot facilitate that. Employers must re-enrol all eligible jobholders who opt out or cease to be scheme members, every three years. Employees under age 22 and over state pension age can request to opt in and employers must then ensure minimum contributions are paid to their pension plan. Minimum contributions must be paid, which after a phasing in period, will be 3% of qualifying earnings from the employer and 5% from the employee, less tax relief, which equates to 4% from the employee and 1% from HMRC.

4. Automatic Enrolment Employers can choose from 3 alternative contribution bases and definitions of pensionable earnings to simplify the self certification of their pension scheme as a qualifying scheme. For employers unable or unwilling to operate a pension scheme the Government have sponsored the creation of the National Employment Savings Trust (NEST). Employers must register with The Pensions Regulator before their Staging Date and carry out a process to define the workforce into categories and communicate with their workers in each category. Employers must have systems to identify changes of category and take timely action as required by the Regulations. Employers or their adviser must make a Declaration of Compliance through the Government Gateway within 5 months of the later of their Staging Date or Postponement Date.

5. Duties Find out your Staging Date http://www.thepensionsregulator.gov.uk/employers/staging-date.aspx Or Google Staging Date Calculator Enter your employer PAYE reference eg, 961 XX00000 Register with The Pensions Regulator before your Staging Date They will send you a letter telling you to register and how to register

6. Duties Define the Workforce to determine which category each employee is in Eligible Jobholders - an employee who earns over the “earnings trigger” which is the income tax personal allowance (£10,000 in 2015/16) and is aged at least 22 years but under state pension age. Employers must identify employees who must be included both at their staging date and ongoing. Non eligible jobholder - an employee who earns over £5,824 (2015/16) and is a) over age 16 but under age 22, b) over state pension age but under age 75 or c) aged between 16 and 75 with earnings between £5,824 and £10,000 (2015/16). They can request to be included and the employer must enrol them and make the appropriate contributions. Entitled worker - an employee between the ages of 16 and 75 who earns less than £5,824 (2015/16). They are entitled to join a scheme at their request but there are no “minimum contributions” and the employer does not have contribute for them.

7. Duties Have systems in place to identify workers that move from one category to another and immediately take the appropriate action for that new category Communicate with each category of worker with information prescribed in the Regulations – there will be a different communication required for each category

8. Duties Unless your Eligible Jobholders are already in a Qualifying Workplace Pension Scheme (QWPS) on your staging date, you must automatically enrol them into one QWPS be an occupational or personal pension scheme be tax registered If a PPS provide money purchase benefits, and have certain types of agreements in place between the employer, the jobholder and the provider of the personal pension scheme.

9. Duties Action point If you have an existing scheme ask the Scheme provider if it can be used as 1.a qualifying workplace pension scheme 2.an auto enrolment scheme If 1 but not 2 then choices are 1.Leave existing members in QWPS and adjust contributions if necessary 2.Join non members and new employees by contract of employment instead of auto enrolment 3.Set up an auto enrolment scheme for non members and new employees 4.Move existing members to an auto enrolment scheme and use for non members and new employees

10. Postponement The employer can postpone their staging date by up to three months Must communicate this to employees before the staging date. The employer can apply postponement to new employees after the staging date, of up to three months from their start date Must communicate this to them when they start work

11. Phasing of Minimum Contributions Minimum Contributions can be paid at the full level from outset or phased in

12. Minimum Contributions Minimum Contributions Basis Qualifying earnings are all earnings between £5,824 and £42,385 (2015/16) – See appendix for full definition Employer MinimumTotal Minimum Staging date to September 2017 1%2% October 2017 to September 2018 2%5% From October 2018 onwards 3%8% The Original Proposal

13. Minimum Contributions The Alternatives - 1 Quality Test 1 Pensionable earnings are at least basic salary Employer MinimumTotal Minimum Staging date to September 2017 2%3% October 2017 to September 2018 3%6% From October 2018 onwards 4%9%

14. Minimum Contributions The Alternatives - 2 Quality Test 2 Pensionable earnings are at least 85% of total pay in aggregate across the category of employees and at least equal to basic salary for each individual jobholder. An annual check is required to ensure the scheme meets the 85% requirement. Employer MinimumTotal Minimum Staging date to September 2017 1%2% October 2017 to September 2018 2%5% From October 2018 onwards 3%8%

15. Minimum Contributions The Alternatives - 3 Quality Test 3 Pensionable earnings are 100% of total pay. Employer MinimumTotal Minimum Staging date to September 2017 1%2% October 2017 to September 2018 2%5% From October 2018 onwards 3%7%

16. Which Pension Scheme Insurance companies – Group Personal Pension Scheme Profitability assessment May be an employer scheme charge NEST – National Employment Saving Trust Set up at the instance of the Government Statutory duty to take all employers and employees who apply Straight forward to apply – operated online Well thought out investment proposition Now Pensions and The Peoples Pension Alternative providers with simplified and centralised scheme design Aim to take almost all comers

17. Final Thoughts If using auto enrolment It should be your payroll system that defines which category each employee is in Your payroll system should be able to produce a joining schedule and a payment schedule in the required format for a number of providers including NEST. You need to make initial decisions about What contribution level to use Who to include and how to enrol them Whether to phase contributions Whether to use Postponement It is advisable to give yourself at least 6 months to get ready