Pension Automatic Enrolment Your questions answered This provides the answers to some of the questions that you have
Q1 A1 Does automatic enrolment affect everyone? Starting from October 2012 (very large employers first), every employer has to enrol into a workplace pension, workers who: are not already in a qualifying workplace pension scheme; are aged 22 or over; are under State pension age; earn more than a minimum amount a year ( 9,440 or 182 per week in 2013/14); and work or usually work in the UK. (The definition of worker may also include casuals and some freelancers who are engaged under the HMRC Modus Operandi ) For us at the BBC, we need to meet our automatic enrolment requirements from 1 February 2013. However, like many employers we will be postponing the date we actually put our workers into a workplace pension arrangement and we are postponing by up to 3 months (weekly staff will be automatically enrolled from week ending 28 April and monthly paid staff from 1 May). If you are already in a BBC pension arrangement, for example LifePlan or the BBC Pension Scheme, then the Government requires us to write to you to let you know that you are already in a pension scheme that meets the automatic enrolment minimum requirements. We will do this soon after 1 February 2013. Q2 A2 I meet the criteria, when will I be enrolled? If you meet the above criteria on 1 May 2013, you will be automatically enrolled into the BBC workplace pension arrangement (NEST) on 1 May 2013. 1 Q3 A3 As the BBC is postponing the date that we actually enrol workers into a workplace pension arrangement by 3 months, this means that the BBC will not automatically enrol qualifying workers or freelancers for the first three months of their contract, once the three months has been exceeded providing you meet the above criteria then you will be automatically enrolled into NEST. Can I join NEST before I get automatically enrolled? If you meet the eligibility criteria, you can join NEST before you get automatically enrolled and the BBC will start to match your contributions from the date you join. If you have a break in your contract however small, you will need to re-apply to join NEST or wait until you will be automatically enrolled again once you have completed 3 months service. Q4 A4 I m over State pension age (SPA) Why have I received a letter about pension automatic enrolment (PAE). We legally have to write to all workers advising them about PAE. As you are over SPA you will not meet the eligibility criteria to be automatically enrolled, therefore you will not be enrolled into NEST. You can still ask to join NEST and depending on how much you earn the BBC may have to pay a contribution as well.
Q5 A5 What is NEST? NEST is the National Employee Savings Trust. NEST is independent of the BBC and if you are automatically enrolled into NEST you will have your own account with them. For more information on NEST visit: nestpensions.org.uk Q6 A6 Q7 A7 Q8 A8 What if I don t meet the criteria to be enrolled? If you don t meet the criteria above when the BBC starts enrolling workers, you will not be automatically enrolled into NEST. You can still ask to join NEST and depending on how much you earn, the BBC may also be required to pay contributions into your NEST account. However, you may be able to join LifePlan the BBC s defined contribution arrangement, if you are not already a member. For more information visit friendslife/bbc/microsite.co.uk Why is this happening? The Government is making automatic enrolment a legal requirement so that it is easier for people to start saving. The full basic state pension in 2013/2014 is 110.15 a week. If you want more, you need to start saving during your working life. The Government is making this easier by requiring employers to automatically enrol workings into a workplace pension arrangement. Who will pay into the pension? Both you and the BBC will pay into NEST. Plus most people will get a contribution from the Government in the form of tax relief. You will pay 1% of your qualifying earnings into your NEST account, and the BBC will put in 1% of your qualifying earnings into your NEST account. The contributions will increase as shown in the table below. Date Your contribution BBC s contributions Total contribution From 1 May 2013 1% 1% 2% October 2017 2% 3% 5% October 2018 3% 5% 8% Q9 A9 What are qualifying earnings? Qualifying earnings are your earnings between 5,668 and 41,450 or 109-797 per week for 2013/2014. 2
Q10 A10 How much pension will I get from NEST when I retire? It is not possible to know for certain what pension you will get from NEST when you retire. This is because the pension you get at retirement depends on two main factors: The investment returns on your NEST account up until your retirement How much it costs to buy a pension at retirement with your NEST account You can get pension estimate from nest.org.uk. You can also visit this website for more details of how the pension you get from NEST works and also how your account is invested. Q11 A11 Can I opt out? Yes. 3 Q12 A12 If you want to opt out of NEST you can. This can be done through the NEST website nestpensions.org.uk. If you opt out within a month (30 days) of receiving the automatic enrolment notice which will be sent in May 2013 or of receiving your welcome pack from NEST, if later, you will be taken out of NEST. Any contributions you have already made will be refunded to you and you will be treated as not having become a member of NEST. You can also opt out after 30 days at any time in accordance with the rules of NEST. In this case your contributions will stay with NEST and will not be refunded to you. These contributions will remain yours, even if you leave the BBC. You will be provided with full details about this by NEST. If I opt out can I re-join NEST at a later date? If you change your mind after you opt out, then the BBC will put you back into NEST once in any 12-month period. To re-join you just need to tell us in writing by sending a letter that has to be signed by you and should include your staff or contract number. You can do this by email if you prefer, as long as you include the statement I confirm I personally submitted this notice to join NEST. You must include the words PAE Opt In Notice in the subject bar of your email. NEST will then send you confirmation of your membership and further information. Letters should be sent to: PAE Opt In/Opt Out Team, BBC Payroll, 2300 The Crescent, Birmingham Business Park, Birmingham. B37 7YE or email to steria.bbcpayroll@steria.co.uk
Q13 A13 Q14 A14 Q15 A15 Q16 A16 Q17 A17 Q18 A18 What if I leave the BBC? If you leave the BBC, your NEST account will stay with you and is yours to use at your retirement. Even after you leave the BBC, you may still be able to contribute into NEST. If you come back to work for the BBC, for example if you are fixed term contractor, you may be automatically enrolled again. In this case we will pay into your same NEST account. What happens to my pension if I die before retiring? Your NEST account will be given to the person or people you want to receive it should you die. You can let NEST know when you join nest.org.uk. Can I take the money out? Currently you can take money from any pension scheme at age 55. You do this by buying a pension with your NEST account. You may also be able to take some of your NEST account as tax free cash at the same time. I m paying into a personal pension already, what should I do? Even if you have a personal pension, the Government still requires that the BBC put you in a BBC workplace pension arrangement if you meet the criteria. Are pensions safe? No savings, including pensions, are ever entirely risk-free. However, the Government has put an increasing number of controls in place designed to minimise the risks. This means your money is better protected than in the past. The Pensions Regulator regulates workplace pensions thepensionsregulator.gov.uk. The Financial Services Authority (FSA) regulates the providers of personal pensions fsa.gov.uk I want to know more about NEST. Could I lose my pension if NEST goes bust? If a pension provider cannot pay, there are a number of organisations who might be able to help. For example, if the provider was authorised by the Financial Services Authority, the Financial Services Compensation Scheme (FSCS) can provide compensation. This will generally be because the provider has stopped trading and/or is unable to pay its debts. For more information visit: fscs.org.uk Produced by: Pension and Benefits Centre February 2013 4