NAEA/ARLA MASTER TRUST Master Trust Presentation NAEA/ARLA MASTER TRUST Presented by: Brian Schubert – Head of Marketing Communications NFoPP Date: 8th October 2014

Firstly........The Bad News Robots will replace agents, predicts boffin. July 2014 Estate agents will be replaced by robots, claims Dr Carl Frey of Oxford University Should estate agents be thinking of retraining, jobs that remain safe from robotic technology include acting, fire fighting and being a priest !! But Auto-Enrolment Pensions? How would that work? Coming to an Estate Agent near you soon!!

Caveat Goddard Perry Consulting (GPC) normally present: Pensions Auto-Enrolment for members NAEA and ARLA Master Trusts This presentation should not be construed as offering financial advice For financial advice please refer to an Independent Financial Advisor (IFA) We would however, recommend you speak to Goddard Perry

Who are Goddard Perry ? Leading independent pensions solutions providers Developing Master Trusts since 2007 - experts in this field SALVUS centralised Master Trust scheme, compliant with Pensions Act 2008 Founder member of Master Trust Association Goddard Perry contact details : 0151 448 5550

Background Auto enrolment is being introduced to encourage people to take responsibility for their own retirement savings as: Increasing longevity of life Retreating state role Under saving for retirement in general Complexity of current pensions Note: Basic state pension is currently £ 113.10 per week

Why save? You need capital to generate retirement income Age 32 State Pension Age 67 5% investment return £25,000 salary assumed 2% rise in salaries Contribution Projected Fund 2% (1% & 1%) £53,014 6% (3% & 3%) £159,041 10% (5% & 5%) £265,069

Company schemes At October 2013: 69% of companies with 50-250 employees had no pension scheme 93% of companies with 1-5 employees had no pension scheme Auto Enrolment: new employer duties The Pensions Act 2008 Section (3)2 “The employer must make prescribed arrangements by which the jobholder becomes an active member of an automatic enrolment scheme”

What are the Employers’ duties ? Employers must..... Have a qualifying pension scheme Auto enrol some employees and Enrol other employees.......into an “ Automatic Enrolment Scheme” Pay contributions within 3 months of becoming eligible Comply ! – there are daily fines by tPR if you don’t

Auto enrolment basic rules: for eligible jobholders If you are 22 or over, earning more than £10,000 a year, you need to be enrolled into a scheme from the employers staging date Minimum employee contributions will gradually increase to 4% of pay after tax, topped up with 1% tax relief by the government

Auto enrolment The employer is required to “Enrol” all eligible jobholders Eligible jobholders can then “Opt out” within 30 days if they do not wish to be in the your company pension scheme If eligible jobholders “Opt out”, the employer has to re-enrol them again 3 years later The Eligible jobholder again has the option to “Opt out”

Auto enrolment contributions The minimum mandatory contributions from the Staging Date, if you are in the scheme, will be: * Less tax relief Employee pays * Employers From Staging Date 1 % From 1st October 2017 3 % 2 % From 1st October 2018 5 %

Auto enrolment issues How to assess staff e.g. part time & commission employees ? Practicalities of HR, Payroll & Pension Provider interfaces Tracking & complying with Auto enrolment rules Communicating with employees Reporting to the Pensions Regulator As per the letter from the Pensions Regulator – the letter states “there may be consequences if you do not comply including fines and/or prosecutions”.

Need to plan ! When is your staging date? Who will be your pension provider? How will you assess workers? Access to AE “middleware” ? Existing arrangements (if any !) may not work…your current provider may decline AE members and /or not provide “middleware”

The NAEA ARLA Master Trust Solution A Master Trust for “non-associated” employers NAEA/ARLA “Sub-Trust” for you to join Guaranteed acceptance Simple documentation Corporate Trustee compliance & governance A “one stop” shop solution Member focused

Trustee that focuses on members needs.. Blake Morgan Pension Trustees Ltd is the Corporate Trustee Trusteeship conducted by experienced pension professionals Director appointed for ongoing supervision Board meets once a month to review all cases. Master risk register, which is reviewed at each meeting tPR returns and tPR pension levy’s

Administration that focuses on the member… All services from one location HS Admin 100% owned by Goddard Perry Group £2.5bn assets under management: £1m - £900m Dedicated administrator for NAEA ARLA Master Trust Over 60 staff 16

The member’s experience… Member joining pack & fact-sheet NAEA/ARLA helpdesk provided by HS Admin NAEA/ARLA branded website - fund information & projection tools Telephone opt-out service Annual Statutory Money Purchase Illustrations (SMPIs) - issued as at 31st December Transfers in - allowed Transfers out - allowed (no penalty on transfer) Full options at retirement - counseling service (GPC)

Strait Logics supply the “Assessment Tool” Architecture Auto Enrolment – Integration and work flow Quality and Security

Auto Enrolment Technology Staging Dates and re-enrolment Management Information and Status Payroll Reference Periods Master Trust Pension Contributions Levels Data Upload Assessment and Reporting Communication

Investment via strength, value and flexibility for the member… Conventional life-style available (DWP approved) Equities when younger then Bonds/Fixed interest BlackRock Aquila are fund investment managers Daily dealing and free switching Daily valuations for members with online access Straight Through Processing (STP) 20

Default Investment Fund 21

Charging structure A “bundled” charge is applied to cover: Administration, AE Assessment, Trusteeship, Accounts, tPR levy & maintaining agreed investments and strategies The charge for NAEA/ARLA is as follows: Annual Management Charge (AMC) of 0.65% per annum There are no member specific charges other than AMC

Key Messages of: the NAEA / ARLA Master Trust Speed, simplicity and flexibility to adapt to your requirements Full use of technology & AE Middleware at no extra cost Competitive charges: 0.65% Annual Management Charge only No extra charges for HS Admin to project manage take-on installation Robust administration with over 25 Years experience Guaranteed acceptance for NAEA/ARLA members You will struggle to get a solution as good as this else where

What next ? As an employer doing nothing is not an option Look through the NAEA/ARLA Master Trust brochure in your delegate pack to get a more detailed understanding Call Goddard Perry to register your interest on 0151 448 5550 Consequences of non-compliance: If 1,000 firms miss their 2014 staging date circa 75,000 employees miss out on entitlements This becomes a nationally important issue with serious consequences

Don’t get it wrong - talk to Goddard Perry: 0151 448 5550 So - Pensions Auto Enrolment: Don’t get it wrong - talk to Goddard Perry: 0151 448 5550

Thank You www.salvustrust.com MASTER TRUST TEAM Steve Goddard - steve.goddard@goddardperry.com Ken Ashton - ken.ashton@goddardperry.com Graham Hickling - graham.hickling@hsadmin.com Sanjay Shingadia - sanjay.shingadia@straitlogics.com Rob Clutton - robclutton@nfopp.co.uk Brian Schubert - brianschubert@nfopp.co.uk www.salvustrust.com Goddard Perry Consulting Ltd Corinthian House 17 Lansdowne Road Croydon Surrey CR0 2BX T: 020 8603 3700 Abbreviations: AE – Auto-Enrolment AMC – Annual Management Charge DB – Defined Benefit Scheme DC – Defined Contribution Scheme DWP – Department of Works and Pensions GPC – Goddard Perry Consulting IFC – Independent Financial Advisor NEST – National Employment Savings Trust PAYE – Pay As You Earn SMPIs – Statutory Money Purchase Illustrations STP – Straight Through Processing tPR – The Pensions Regulator