Automatic enrolment is here. Start your plan today.

Automatic enrolment is here. Start your plan today. CAPITA_TPR_autoenrol_quickguide_A5-8ppg_AW4_v1.indd 1 02/08/2012 11:24

A quick guide to preparing for automatic enrolment Workplace pensions law has changed. Every employer in the UK will be required to help more of their workers to save for their retirement. Employers will need to automatically enrol certain workers into a pension scheme and contribute towards it. All organisations have a staging date for when they need to do this. The Pensions Regulator has sent you a letter notifying you of your staging date. This leaflet gives a summary of the main steps employers need to take to prepare for automatic enrolment. Stage 1 Now Nominate a point of contact Know your staging date and develop a plan 2 An introductory planning guide for automatic enrolment CAPITA_TPR_autoenrol_quickguide_A5-8ppg_AW4_v1.indd 2 02/08/2012 11:24

Stage 2 Between now and staging Stage 3 At staging and beyond Assess your workforce Automatically enrol eligible jobholders into a pension scheme Review your pension arrangements Register with The Pensions Regulator and keep records Communicate the changes to all your workers Contribute to your workers pensions An introductory planning guide for automatic enrolment 3 CAPITA_TPR_autoenrol_quickguide_A5-8ppg_AW4_v1.indd 3 02/08/2012 11:24

Now Between now and staging At staging and beyond Nominate a point of contact We will send you essential information and alerts throughout the automatic enrolment process. To make sure this information gets to the right person, please confirm your details or nominate a contact at: www.tpr.gov.uk/autoenrol-nominate Know your staging date and develop a plan The date from which the new law applies to your company is called your staging date. On 1 April 2012, all staging dates were set according to the size of an employer s largest PAYE scheme on that date. In most cases, companies that share PAYE schemes with multiple employers will have the same staging date. All employers are able to bring forward their staging date. If you intend to do this, you must notify The Pensions Regulator in writing. 4 An introductory planning guide for automatic enrolment CAPITA_TPR_autoenrol_quickguide_A5-8ppg_AW4_v1.indd 4 02/08/2012 11:24

Now Between now and staging At staging and beyond Assess your workforce Workers who will need to be automatically enrolled into a pension scheme are known as eligible jobholders. An eligible jobholder is: aged between 22 and state pension age working or ordinarily working in the UK earning above 8,105* You will need to assess who in your workforce is an eligible jobholder. You must automatically enrol eligible jobholders into a qualifying pension scheme and make contributions towards it. Workers who are not eligible jobholders still have a right to opt in to a pension scheme or a right to join one. * This figure is for the 2012-2013 tax year. The Department for Work and Pensions (DWP) intends to announce the figure for the 2013-2014 tax year in November 2012. Review your pension arrangements If you have an existing pension scheme, you will need to check if it meets the criteria to qualify as an automatic enrolment scheme. If it does, you may wish to consider enrolling all eligible jobholders into it. If your scheme does not currently qualify, you may be able to change the scheme rules or amend the terms of the policy to make it a qualifying scheme. If you do not have a qualifying pension scheme that is suitable for automatic enrolment you will need to find one. If you have a defined contribution (DC) scheme, you can use our online tool to check if your existing DC scheme meets the minimum criteria for an automatic enrolment scheme as set out in legislation: www.tpr.gov.uk/dc-qualifyingscheme-tool An introductory planning guide for automatic enrolment 5 CAPITA_TPR_autoenrol_quickguide_A5-8ppg_AW4_v1.indd 5 02/08/2012 11:24

Now Between now and staging At staging and beyond Choosing a qualifying pension scheme If you need to select a qualifying pension scheme, you can choose from a number of pension providers including the National Employment Savings Trust (NEST),which has a public service obligation to accept all employers that apply to join it. For a list of pension providers, please refer to the Where can I find more information? section on page 10 of this leaflet. To be a qualifying scheme, minimum contributions must be made or it must provide a minimum rate at which benefits will build up. A scheme suitable for automatic enrolment must also not: impose barriers to joining the scheme, such as probationary periods or age limits for members require staff to make an active choice to join or take other action prior to joining require the worker to provide extra information to stay in the scheme Choosing a scheme with good outcomes It is important to make sure the pension scheme you choose is able to deliver good outcomes for your workers retirement savings. A financial adviser can offer advice on pension schemes that are right for your company. Our leaflet Selecting a good automatic enrolment scheme will also assist you. It sets out questions you can ask when: selecting a pension scheme for automatic enrolment, or reviewing the suitability of your existing scheme To download the Selecting a good automatic enrolment scheme leaflet and to use the qualifying scheme tool go to: www.tpr.gov.uk/dc-qualifyingscheme-tool 6 An introductory planning guide for automatic enrolment CAPITA_TPR_autoenrol_quickguide_A5-8ppg_AW4_v1.indd 6 02/08/2012 11:24

Communicate the changes to all your workers Employers must inform all their workers in writing about the pension changes and how it affects them personally. This includes all your workers (except those aged under 16, or 75 or over), which can include fixed-term contract workers. You can download letter templates from our website to use to write to your workers. Many of the templates tailor information to help workers understand what the changes specifically mean for them. This, in turn, could minimise their questions to you. The duty is on the employer to provide the right information to the right individual, at the right time. For more information and to use the letter template tools go to: www.tpr.gov.uk/autoenrolmentemployee-communications An introductory planning guide for automatic enrolment 7 CAPITA_TPR_autoenrol_quickguide_A5-8ppg_AW4_v1.indd 7 02/08/2012 11:24

Now Between now and staging At staging and beyond Automatically enrol your eligible jobholders There is a process that employers need to follow to make an eligible jobholder an active member of an automatic enrolment pension scheme. Certain information about your eligible jobholders will need to be supplied to pension scheme managers at specific points in the process. Register with The Pensions Regulator and keep records You are required to inform us how you have fulfilled your new automatic enrolment duties by registering this information with us shortly after your staging date. You will need to maintain specified records about your qualifying scheme and the workers enrolled into it, including: the workers earnings contributions paid opt out records for eligible jobholders. You will need to monitor the age and earnings of all workers who are not eligible jobholders and not already in a qualifying scheme on an ongoing basis. If any worker s circumstances change in a pay period so that they become an eligible jobholder, they will need to be automatically enrolled. 8 An introductory planning guide for automatic enrolment CAPITA_TPR_autoenrol_quickguide_A5-8ppg_AW4_v1.indd 8 02/08/2012 11:24

Contribute to your workers pensions After your staging date, you must contribute to your chosen pension scheme on behalf of your workers. The minimum contribution rates that an employer must pay into their workers pension scheme will be introduced gradually over a 6 year period (from 2012 to 2018). This is known as phasing. The minimum employer contribution will change from 1% to 3% over this time period. (unless the employer is self certifying). Phasing will apply to most, though not all, types of pension scheme (your scheme provider will be able to tell you if phasing applies to you). Phasing will apply to most, though not all, types of pension scheme (your scheme provider will be able to tell you if phasing applies to you). An introductory planning guide for automatic enrolment 9 CAPITA_TPR_autoenrol_quickguide_A5-8ppg_AW4_v1.indd 9 02/08/2012 11:24

Where can I find more information? To get more detailed information to help you to prepare for automatic enrolment, go to www.tpr.gov.uk/autoenrolment You can also find more information about automatic enrolment and pensions from these organisations: The Association of British Insurers (ABI) www.abi.org.uk/pensionproviders NEST www.nestpensions.org.uk IFA Promotion www.unbiased.co.uk 10 An introductory planning guide for automatic enrolment CAPITA_TPR_autoenrol_quickguide_A5-8ppg_AW4_v1.indd 10 02/08/2012 11:24

Your cut-out-and-keep plan at a glance Nominate a point of contact Nominate the person who should receive important updates from The Pensions Regulator at www.tpr.gov.uk/autoenrol-nominate Do this today Now 01 Know your staging date and develop a plan You ll need a plan to be ready on time for your automatic enrolment duties which start on your staging date. Do this as soon as possible Between now and staging Assess your workforce Review your pension arrangements Communicate the changes to all your workers Do an initial assessment of your workforce to see who you will need to automatically enrol into a pension scheme. Do continuous assessment after staging to pick up eligible jobholders. Review your pension arrangements to see if they qualify for automatic enrolment. The DC qualifying scheme tool may help www.tpr.gov.uk/dcqualifying-scheme-tool You must inform all your workers in writing about the pension changes and how it affects them personally. You may need to do this before and after staging. Automatically enrol eligible jobholders into a pension scheme Staging date Automatically enrol eligible workers into a pension scheme. You need to complete this within one month of your staging date. Constantly assess your workforce to identify eligible jobholders. Insert your staging date here. At staging and beyond Register with The Pensions Regulator and keep records Contribute to your workers pensions Register with The Pensions Regulator to tell us what you have done to comply and keep records. Contribute to your workers pensions. An introductory planning guide for automatic enrolment 11 CAPITA_TPR_autoenrol_quickguide_A5-8ppg_AW4_v1.indd 11 02/08/2012 11:25

A quick guide to preparing for automatic enrolment The Pensions Regulator August 2012 You can reproduce the text in this publication as long as you quote The Pensions Regulator s name and title of the publication. We can produce it in Braille, large print or on audio tape. We can also produce it in other languages. CAPITA_TPR_autoenrol_quickguide_A5-8ppg_AW4_v1.indd 12 02/08/2012 11:25