We DON T have a Pension Scheme, and must set one up ASAP! Even if we had one, it may not comply Compulsory Workplace Pensions
Worried about Compulsory Workplace Pensions? Does the Pension Scheme comply with the new regulations? Contents 04 What must employers do? 07 When do we have to start our QWPS? 09 11 12 15 17 19 20 21 22 Who needs to be Auto-Enrolled? How much do we have to contribute? What decisions do we have to make? What do we need to communicate to our workforce? What will happen if we don t comply? Are there any other potential penalties? How do I deal with opt outs? How do I select a default fund? Acorn services Professional service with a personal touch 2 Professional service with a personal touch 3
What must employers do? Employers with more than one employee have to enrol certain workers automatically in to a Qualifying Workplace Pension Scheme (QWPS) by a certain date, depending on the size of their workforce. Employers with the largest numbers of employees have had to do this since 1st October 2012. The actual dates for other employers will depend on their Staging Dates, which in turn will depend on the size of the Employer s largest payroll. If you don t already have a Scheme, you must set one up If you have a scheme, you must ensure it complies You will need to: Know and understand your Staging Date Assess workforce to determine Eligible Jobholders, Non-eligible Jobholders and Entitled Workers Set up and contribute in to a QWPS Ensure Scheme meets new quality standards Understand who needs to be enrolled and when. All eligible workers must be offered your QWPS, including temporary and permanent workers Automatically enrol certain employees in to your QWPS Invite other types of workers to join your QWPS Monitor age and earnings regularly as workers can move between different categories Continue to automatically enrol certain workers in to your QWPS Run an opt in / joining process for other workers Register with The Pensions Regulator within four months of your Staging Date Certify every 18 months that the contributions to your Scheme will meet the quality requirements. Re-register with The Pensions Regulator every three years Ensure that correct communication is provided to workers within correct timescales. This is essential at all stages Keep various records. This is essential, to prove compliance with your Employer Duties Keep records of workers opting out / in to your QWPS Process refunds and re-enrol workers every three years Ensure correct payments are made for employees Engage with Payroll Providers Refund contributions for opt outs within set timescales Professional service with a personal touch 4 Professional service with a personal touch 5
Worried about Compulsory Workplace Pensions? When do we have to start our QWPS? This varies depending on the number of employees that you have on your payroll. It is broadly determined by the number of employees on your largest payroll. PAYE SCHEME SIZE 500-799 350-499 250-349 160-249 90-159 62-89 50-53 Up to 50 STAGING DATE 1st November 2013 1st January 2014 1st February 2014 1st April 2014 1st May 2014 1st July 2014 1st April 2015 Between 1st August 2015 & 1st April 2017, depending on PAYE reference no. Lessen the impact of introducing the Workplace Pension by acting now! Contact the Team at Acorn to help make the transition hassle free. Call us on: Professional service with a personal touch 6 Professional service with a personal touch 7
How is my workforce split? Who needs to be Auto-Enrolled? Eligible Jobholder? Non-eligible Jobholder? Entitled Worker? The current levels are set out below: Eligible Jobholder (must make at least minimum contributions) NOTE Must be auto-enrolled SALARY Earns above 10,000 AGE 22-State Pension Age (SPA) Non-eligible Jobholder (must make at least minimum contributions, if they opt in) Do not have to be auto-enrolled but can opt in 5,824* - 9,999 10,000+ 16-74 16-21 or SPA-74 Entitled Worker (no requirement for an Employer contribution) Do not have to be auto-enrolled but are entitled to join a Scheme, (doesn t have to be the QWPS) below 5,824* 16-74 * For the 2015 / 2016 Tax Year Professional service with a personal touch 8 Professional service with a personal touch 9
How much do we have to contribute? This will depend upon the definition of earnings that contributions are based on: Option 1 At least basic pay is pensionable Phasing period Staging date - Sept 2017 Oct 2017 - Sept 2018 Oct 2018 onwards Minimum employer payment 2% 3% 4% Minimum total payment 3% 6% 9% Option 2 Qualifying earnings (or at least 85% of total pay) is pensionable Phasing period Staging date - Sept 2017 Oct 2017 - Sept 2018 Oct 2018 onwards Minimum employer payment 1% 2% 3% Minimum total payment 2% 5% 8% Option 3 Total pay is pensionable Phasing period Staging date - Sept 2017 Oct 2017 - Sept 2018 Oct 2018 onwards Minimum employer payment 1% 2% 3% Minimum total payment 2% 5% 7% You can choose different options for different employee categories. You can make more than the minimum level of contributions. Professional service with a personal touch 10 Professional service with a personal touch 11
What decisions do we have to make? Amend existing arrangements, set up new Scheme, or both? What system should I implement to ensure correct contributions are taken from payroll and allocated to QWPS? How much do I want to do myself as Employer and how much could Acorn do for me? How do I communicate the appropriate information to my Workforce? Will I be able to cope with the additional administration? Should I provide initial and / or ongoing individual Financial Advice for my Employees? How do I choose a Default Fund Selection(s)? What definition of Pensionable Salary should I use? Contact the Team at Acorn we can help you. Call us on: Professional service with a personal touch 12 Professional service with a personal touch 13
What do we need to communicate to our workforce? Fully inform your workforce about the Scheme What is it? How do they join? When can they join? Contact the Team at Acorn we can do all of this for you. Call us on: How much will it cost? What will we contribute, as their Employer? How will contributions be taken? The reasons for the Default Fund Selection How can they track their Pension? How can they opt out? Professional service with a personal touch 15
You could end up in Court, if you don t comply! What will happen if we don t comply? The Pensions Regulator (TPR) will be responsible for ensuring that you comply with your Employer Duties. Although they will focus on education rather than imposing penalties, they do have the powers to take action against Employers who fail to carry out their duties. There is a three stage process that TPR will follow: Stage 1: Compliance / unpaid contribution notice This will detail the breach and instruct you to put things right within a specific timescale. It may include a requirement to pay the backdated contributions plus interest. Stage 2: Fixed Penalty Notice - 400 If you have not followed the Compliance Notice (Stage 1) you will be issued a Fixed Penalty Notice giving four weeks (typically) from the date of the Fixed Penalty Notice to put things right. Failure to comply by that date will result in the Fixed Penalty being applied. Acorn will help you comply with Compulsory Workplace Pension Legislation in order to help prevent you ending up in Court. Call us on: Stage 3: Escalating Penalty Notice If you still do not comply, daily escalating penalties will apply: No. of Employees 1-4 5-49 50-249 250-499 500 or more Daily Rate 50 500 2,500 5,000 10,000 Professional service with a personal touch 16 Professional service with a personal touch 17
I wish I knew a company that could help me make sense of Compulsory Workplace Pensions Are there any other potential penalties? Yes, there are three other types: Wilful failure to comply Fines and/or up to two years imprisonment Inducements Employers who induce workers not to join or to opt out of a Pension Scheme will be subject to the three stage Compliance Process Prohibited Recruitment Conduct Employers are not allowed to make any statement or ask any question during the recruitment process, which indicates (either explicitly or implicitly) that the worker may not join, or may opt out of a Pension Scheme. Separate penalties apply to Employers using prohibited recruitment conduct of between 1,000 and 5,000 Professional service with a personal touch 18 Professional service with a personal touch 19
How do I deal with opt outs? How do I select a Default Fund? You must inform your Staff of their right to opt out of a Qualifying Workplace Pension Scheme (QWPS) and how to opt out. The Employer must not handle the pre opt out process or send out opt out forms. This must be handled by the Product Provider / Scheme Administrator Completed Opt-Out forms would normally be sent to the Employer A one-month opt out window starts on the latter of 2 dates: 1. When active membership is achieved 2. When the Employer issues a letter/ Email to the job holder Early opt outs before the opt out window starts are invalid If an Employee who had previously opted out decides they want to start paying again, they can do so. The Employer has to accept them back once in every 12 month period Must be suitable for Scheme membership and potential New Entrants Must be suitable for age profile / investment experience of the Employees Must have a set fund objective Must be competitively priced Must be a Multi-Asset Fund Must have Past Performance record If the Employee opts out, the Employee and Employer will get a full refund of all contributions The Team at Acorn can recommend the most suitable default fund for you. Call us on: Professional service with a personal touch 20 Professional service with a personal touch 21
Acorn services As many as you like: bespoke solutions tailored to requirements and budget You choose what service you want. Employer Consultancy Services Communication Services Administration Services Individual Financial Advice Analysis of current Pension Arrangements Analysis of Payroll Data Advice on your Auto-Enrolment requirements Advice on current Scheme (if applicable) Help select QWPS provider / changes required to your existing Scheme Help with Selection of Default Fund(s) Delivery of Group Presentations One to one Member Meetings Handle all Member communications about the Scheme Manage auto-enrolment process Manage opt outs Reporting to Employer periodically Project Management Analysis and cleansing of payroll data Member changes Dealing with QWPS Provider Liaising with HR / Payroll to ensure correct contributions deducted from Members Run QWPS system on behalf of Employer to ensure correct contributions allocated to Employees Pensions How to join Scheme How much to contribute Where to invest, default fund or otherwise Advice regarding old pensions Life Assurance Investments Income Protection Ongoing Reviews Individual and Scheme Record keeping The management team at Acorn have a combined 100 years experience of dealing with pension planning, and we can help make the transition hassle free. Call us on: Handle all member enquiries Professional service with a personal touch 22 Professional service with a personal touch 23
Call us on: 25 St George s Road Cheltenham Gloucestershire GL50 3DT Thank you Acorn for making it all so easy!