MERCER WEBCAST AUTO-ENROLMENT: A SURVIVAL GUIDE FOR SMEs AUGUST 7, Craig Haines & Ian Forward Elect by Mercer Marsh Benefits.

Transcription

1 MERCER WEBCAST AUTO-ENROLMENT: A SURVIVAL GUIDE FOR SMEs AUGUST 7, 2013 Craig Haines & Ian Forward Elect by Mercer Marsh Benefits Bristol MERCER WEBCAST

2 Objectives for today 6 steps to survival (and success!) 1. Know your facts 2. Be aware of the key impacts 3. Engage your support team 4. Assess your workforce and data requirements 5. Review your current arrangements 6. Communicate the changes Craig Haines Elect Ian Forward Elect MERCER WEBCAST 07 August

3 STEP 1: Know your facts What is auto-enrolment? The government has introduced a law starting in October 2012 to make it easier for people to save for their retirement. It requires all employers to enrol their staff into a workplace pension scheme. Both the employer and the employee will have to contribute a minimum financial amount. The Pensions Regulator has released detailed guidance on employers duties. MERCER WEBCAST 07 August

4 STEP 1: Know your facts Explaining the jargon worker eligibility jobholder qualifying scheme? qualifying earnings staging date MERCER WEBCAST 07 August

5 STEP 1: Know your facts When will it apply to me? The staging date is the date on which employers need to enrol eligible jobholders and start making contributions to a qualifying scheme. This is based on employer size, as measured by the number of employees on the PAYE payroll. Employer size (by PAYE scheme size) or other description Automatic enrolment duty date From To To 250 or more members 1 October February to 249 members 1 April April to 49 members 1 August October 2015 Less than 30 members (dependent on PAYE reference number) 1 June April 2017 Employers without PAYE schemes 1 April MERCER WEBCAST 07 August

6 STEP 1: Know your facts Who does it apply to? Entitled workers: Non-eligible jobholder: Eligible jobholder: Can ask to opt in. Company not required to contribute. Can ask to opt-in and Company must pay contributions. Company must auto-enrol and then pay contributions. Age (inclusive) Earnings* Under lower earnings threshold ( 5,668) Between 5,668-9, SPA ** SPA** 74 Entitled worker Non-eligible jobholder Over earnings trigger for automatic enrolment ( 9,440) Non-eligible jobholder Eligible jobholder Non-eligible jobholder * All earnings figures are in 2013/14 terms ** State Pension Age MERCER WEBCAST 07 August

7 STEP 2: Be aware of the key impacts How much will you need to pay? How will you manage your data? Can you use your current scheme? How will it affect your market position? What is the overall cost of auto-enrolment? MERCER WEBCAST 07 August

8 How ready do you feel you are for auto-enrolment? Extremely prepared Somewhat prepared A little unprepared Not at all prepared MERCER WEBCAST 07 August

9 STEP 3: Engage your support team Create a working party WHO SHOULD BE INCLUDED? Some or all of the following: Payroll, HR, Finance, IT Support Your pension advisers and payroll provider Appoint a Project Manager. WHAT SHOULD IT DO? Responsible as a group for delivering the project to completion. WHEN SHOULD IT MEET? Schedule meetings now up to staging date to get in diaries. HOW SHOULD IT OPERATE? Agenda: Set it regularly. Make sure you update the group on any issues. MERCER WEBCAST 07 August

10 STEP 4: Assess your workforce Create a working party Workforce It is important that you can identify all of your workers in order that you can determine their eligibility. These include: Salaried staff Contract workers Offshore workers Expatriates Casuals & temporary workers Zero hours Have you made any alternative pension arrangements with your employees? Pay elements Do you know all of your different pay elements? Do you know how these fit within the definitions of: Qualifying Earnings Basic Salary Pensionable Salary Total Pay How will you categorise your staff? MERCER WEBCAST 07 August

11 STEP 4: Assess your workforce Legal minimum contribution rates Minimum contributions Requirements for self certifying Salary definition Qualifying earnings ( 5,564 to 42,475 in 2012/13) Basic salary Pensionable Earnings * Total earnings Contribution Total Contribution 8% (Min. Employer 3%) Total 9% (Min. Employer 4%) Total 8% (Min. Employer 3%) Total 7% (Min. Employer 3%) * Tier 2 : Pensionable Earnings under Tier 2 must be greater than Basic Salary and at least 85% of total earnings across the scheme MERCER WEBCAST 07 August

12 STEP 4: Assess your data requirements Are your existing systems fit for purpose? Assessment needs to take place every pay reference period Systems need to: Determine eligibility Enrol employees Issue communications Who will have the responsibility for this? HR Payroll Timelines are critical Check: Does your payroll provider support this? Does you pension provider support this? Can you manage this manually? MERCER WEBCAST August 7,

13 STEP 5: Review your current arrangements If you have an existing pension scheme, there are a number of options: Use an existing pension arrangement as long as it is deemed suitable (meets the qualifying criteria) Set up your own qualifying scheme, or adjust an existing scheme so that it meets the qualifying criteria Enrol employees into NEST or another suitable pension scheme If you have already got a qualifying pension in place, don t assume it will be less work If you have already got a qualifying pension in place, don t assume it lkevin O Boyle, Head of Pensions at BT MERCER WEBCAST 07 August

14 STEP 6: Communicate the changes What, when and how will you tell employees? What do they need to do and why? When will they be enrolled? Who can they contact? What will it cost them? - employee and employer contribution values by pay reference period Options and implications of opting out How do you promote this as a benefit to employees? MERCER WEBCAST 07 August

15 What is the cost of auto-enrolment? Employer contributions Employee communications Managing your scheme Your other benefits Non-compliance MERCER WEBCAST 07 August

16 Other considerations Statutory employee consultation may be required Review of employment contracts Review new hire process and documentation: Offer letters Contracts Transition process for current scheme members Cost of changes to contribution structures and increased membership Employee communication Impact on current pension providers e.g. Capabilities, services, pricing MERCER WEBCAST 07 August

17 How we can help 6 steps to survival (and success!) 1. Know your facts 2. Be aware of the key impacts 3. Engage your support team 4. Assess your workforce and data requirements 5. Review your current arrangements 6. Communicate the changes MERCER WEBCAST 07 August

18 Further Information Visit our auto-enrolment homepage /solutions/auto-enrolment-for-smes Or contact us. Craig Haines +44 (0) MERCER WEBCAST

19 Questions Craig Haines Elect Ian Forward Elect QUESTIONS Please type your questions in the Q&A section of the toolbar and we will do our best to answer as many questions as we have time for. To submit a question while in full screen mode, use the Q&A button, on the floating panel, on the top of your screen. FEEDBACK Please take the time to fill out the feedback form at the end of this webcast so we can continue to improve. The feedback form will pop-up in a new window when the session ends. CLICK HERE TO ASK A QUESTION TO ALL PANELISTS View past recordings and sign up for upcoming webcasts MERCER WEBCAST August 7,

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