AUTO-ENROLMENT

CURRENT POSITION Only CMS employees on main payroll are enrolled into either USS or OSPS or can stay with existing scheme e.g. NHSPS No pension provision for casual workers or re-employed pensioners (Stake holder available) An individual can decide to opt-out before they are enrolled and their decision is considered final

NEW - AUTO-ENROLMENT All eligible employees and workers must be enrolled automatically into a qualifying pension scheme; or given the right to opt into (or join) a qualifying pension scheme If enrolled automatically they must be enrolled before they can choose to opt-out and if they opt-out they must be re-enrolled every 3 years

Qualifying schemes “Qualifying” = meets government criteria Main schemes USS, OSPS, NHSPS, etc are qualifying schemes. Old Stakeholder scheme NOT a qualifying scheme and replaced by NEST NEST available to casual workers (can opt to join any time, will be auto-enrolled after 3 month deferral/waiting period)

STAGING DATE - 1 March 2013 i.e. the date from which we have duties under the new legislation, in particular: to advise existing eligible staff that they will be enrolled, and to enrol all new eligible joiners into a ‘qualifying scheme’. (NB majority of staff are already enrolled in a pension and therefore not affected) Some other institutions (e.g. spin-outs) will start at same time Colleges will join separately and later

DEFERRAL DATE – 1 June 2013 Core will be key in auto-enrolment process, but Core Pay only being implemented in May Under the regulations employers may defer full implementation for up to 3 months Therefore: Auto-enrolment for new starters (employees) starts 1 March (payroll/pensions will keep manual records) Auto-enrolment of existing staff deferred to 1 June New starters (casuals) will be advised that auto-enrolment duties are deferred for 3 months to 1 June

A word on ‘Joint Appointments’ University and College are separate employers Each has separate staging dates Therefore those with joint University/college appointments will get separate communications from each employer and each has a separate duty to auto-enrol (individual wishing to opt-out must opt-out twice)

KEY DUTIES Assess new and existing workforce Enrol those who are eligible Monitor those who are not currently eligible and enrol if they become eligible Provide regular pensions information Repeat enrolment exercise every three years

WHO IS ‘ELIGIBLE’? All employees and workers must be put into one of four categories: Excluded Workers Eligible Job-holders Non-eligible Job-holders Entitled Workers …what does this mean?

1. Excluded workers Engagement types that are definitely excluded: Agency workers; Self-employed contractors; Anyone NOT ordinarily working in UK We are also not obliged to enrol casual workers if they have worked for less than 12 weeks.

2. Eligible job holders Definition: Aged between 22 and State Pension Age (SPA) Working in the UK Earnings > £9,440 per annum (£787) per month. What happens? Must be auto-enrolled if new joiner from 1 March Existing ‘eligible jobholder’ employees who are NOT in pension scheme will be auto-enrolled 1 June If they opt-out, will be re-enrolled in 3 years

3.Non-eligible jobholder Definition: Age 16-75 and earnings between £5,668 pa (£473/month) and £9,440pa (£787/month) OR Aged between 16 and 21 or between SPA and 74 and earning over £9,440pa (£787/month) What happens? We DO NOT have to auto-enrol, but From 1 March they have the right to opt into the pension scheme associated with their employment type, and for the University to pay their employer contributions We must monitor them to see if they tip over the age or earnings thresholds to become eligible jobholders

4. Entitled Worker Definition: Aged between 16 and 74 Earnings < £5,668pa (£473/month) What happens? They may join a scheme but the University does not need to pay the employer contributions. We must monitor them to see if they tip over into another category

Key assessment criteria – Age 16 – 21 Can only be Entitled Worker or Non-eligible Job-holder 22 - State Pension Age Could fall into any category State Pension Age – 74 Can only be Entitled Worker or Non-eligible Job-holder

Key assessment criteria – earnings (and pay reference period) Assessment of earnings has to be made in each pay reference period Is the worker paid monthly or termly? That, not annual salary, has to be used to assess for auto-enrolment If in any one pay reference period earnings spike above a threshold, appropriate action must be taken NB monthly threshold triggering auto-enrolment = £787

Non-eligible Job-holder ASSESSMENT RESULTS Age Earnings 16 – 21 22 – SPA SPA - 74 Below £5668 Entitled Worker £5668-£9440 Non-eligible Job-holder Over £9440 Non-eligible Jobholder Eligible

Multiple University Appointments Default: Treat each contract separately unless Contracts are of same type in same department If so, aggregate Exceptions: To be reviewed and agreed with Personnel Services (Ignore college appointments)

ENROLMENT - Summary Eligible Job-holders Non-eligible Job-holders Must be enrolled May opt out Those who opt out have to be re-enrolled later Non-eligible Job-holders Must be provided with information Must be allowed to opt in if they wish Must be monitored to see if they cross threshold Entitled Workers Must be allowed to join a pension

Re-employed pensioner Employee including Variable Hours Re-employed pensioner If eligible job holder auto-enrol under contractual provision at start of employment If joins: no further enrolment obligation If opts out: no further obligation until re-enrolment three years later If not eligible: monitor and re-enrol when hits trigger e.g. at 22nd birthday or when earnings increase Casual Worker Including casual teacher examiner personal services consultant Apply three month waiting period If worker leaves: no obligation to enrol If worker still engaged after three months: assess if eligible: enrol (in NEST) if not eligible: continue to monitor and enrol when hits trigger Not working in UK Agency Worker Secondee Self-employed No action required

Reducing the departmental burden General Automating processes where possible (for example building notification letters into new contract templates) Employees Enrolment, assessment and ongoing monitoring will be facilitated through Core/Payroll/Pensions Casual workers deferring assessment for three months to minimise enrolment/cost Spikes in earnings have been evened out in part by move to monthly payroll

Action required by Departments Clarify employment status of non-CMS contracts (employee/ worker/self-employed?) and where ordinarily working? Ensure we hold basic data for all workers (DOB; email address) and note pay reference periods Budget for likely additional costs of employer contributions Encourage casual workers to submit regular claims, to avoid un-representative spikes in earnings Ensure that casual appointments are ended promptly after 12 weeks Issue new contract format and stop issuing pensions opt-out forms to new starters

Next steps - February When? What happens? Email to all staff advising of the change in the law “information letter to existing staff” Departments to ensure that those who may not see email are forwarded the message Briefings to administrators mid-February As soon as possible General briefings 14 and 21 February, plus divisional meetings

Next steps – wef March Existing staff What happens? When? email to all staff in a pension scheme (letter 1 - no action needed) email to all staff not in pension scheme (letter 2 - advising of deferral of auto-enrolment to June) Staff wishing to join a pension scheme may do so By staging date (1 March) Wef 1 March

Next steps – wef June Existing staff What happens? When? All eligible existing staff not in a pension scheme will be auto-enrolled Auto-enrolled staff will be written to individually advising them of this and of their right to, and the mechanism to opt-out Core takes over ongoing monitoring of age/earnings for non-eligible job holders and entitled workers 1 June As soon as the pension scheme confirms their membership Wef June

Next steps – wef March New Starters What happens? When? Contract wording is amended (+ new annexe about automatic enrolment) Casual letter of engagement is amended, advising of 3 month deferral of auto-enrolment New pension scheme – NEST – is available for casual staff Old opt-out form is withdrawn Also new starters under eligibility thresholds for age/earnings start to be monitored To be available wef mid-Feb to be used for new employee starters from 1 March To be used for new casual starters from 1 March From 1 March

Additional information Marie Curie students will be given special presentations (they will be enrolled in USS and both employee and employer contributions will come out of their allowance) Handbooks and pensions policy will be updated Flexible retirement now available to support staff too.