Auto Enrolment February 2015 - PowerPoint Presentation

Slide1

Auto Enrolment

February 2015

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About Argentis

Financial Planning and Wealth Management BusinessIndependent and whole of market adviceArgentis has Chartered Status –

Chartered firms must ensure staff members acquire and retain the necessary knowledge and skills to deliver the highest quality advice

Offices

– Canterbury, London, Salisbury & Cobham20 highly qualified advisers

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Auto-Enrolment

The process of automatically enrolling employees into a qualifying workplace pension or similar scheme has begun.The largest UK Employers are now past their staging dates having auto enrolled all non pension scheme workers.

SME’s to auto enrol over the next 12 to 18 months.

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Auto-Enrolment

Auto Enrolment is less about pensions and more about business planning, processes and systemsPlanning ahead is essential

If you have less than 6 months until staging and have not started planning immediate action is required

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What will employers have to do?

Employers will be required by law to:Set up & register a suitable pension scheme.

Provide Pension/Auto-Enrolment information to employees.

Enrol all eligible employees into a qualifying scheme.

Confirm all relevant steps taken to The Pensions Regulator.

Pay contributions for all eligible employees, unless they choose to opt-out of the scheme.

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When will this affect employers?

Every employer has been allocated a ‘Staging Date’, when they must comply with the new legislation.

The key Staging Dates have been amended slightly with a delay for employers with less than 50 workers.

You can find

your staging date via

http

://

www.thepensionsregulator.gov.uk/employers/tools/staging-date

Employer PAYE Size (April 2012)

Staging Date

350 to 499

01 January 2014

250 to 349

01 February 2014

160 to 249

01 April 2014

90 to 159

01 May 2014

62 to 89

01 July 2014

61

01 August 2014

6001 October 20145901 November 20145801 January 201554 to 5701 March 201550 to 5301 April 2015

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PAYE scheme size or reference

Staging date

PAYE scheme size or reference

Staging date

Less than 30 with PAYE no. 92, A1-A9, B1-B9, AA-AZ, BA-BW, M1-M9, MA-MZ, Z1-Z9, ZA-ZZ , 0A-0Z, 1A-1Z or 2A-2Z

01-Jun-15Less than 30 with PAYE no. 38-46, 7A-7Z, O1-O9 or OA-OZ

01-Oct-16

Less than 30 with PAYE reference number BX

01-Jul-15

Less than 30 with PAYE no. 47-57, 8A-8Z, Q1-Q9, R1-R9, S1-S9, T1-T9, QA-QZ, RA-RZ, SA-SZ or TA-TZ

01-Nov-16

40-49

01-Aug-15

Less than 30 with PAYE no. 58-69, 9A-9Z, U1-U9, V1-V9, W1-W9, UA-UZ, VA-VZ or WA-WZ

01-Jan-17

Less than 30 with PAYE reference number BY

01-Sep-15

Less than 30 with PAYE no. 70-83, X1-X9, Y1-Y9, XA-XZ or YA-YZ

01-Feb-17

30-39

01-Oct-15

Less than 30 with PAYE no. P1-P9 or PA-PZ

01-Mar-17Less than 30 with PAYE reference number BZ01-Nov-15Less than 30 with PAYE no. 84-91, 93-9901-Apr-17Less than 30 with PAYE no. 02-04, C1-C9, D1-D9, CA-CZ or DA-DZ01-Jan-16Less than 30 unless otherwise described01-Apr-17Less than 30 with PAYE no. 00 05-07, E1-E9 or EA-EZ01-Feb-16Employer who does not have a PAYE scheme01-Apr-17

Less than 30 with PAYE no. 01, 08-11, F1-F9, G1-G9, FA-FZ or GA-GZ

01-Mar-16

New employer (PAYE income first payable between 1 April 2012 and 31 March 2013)

01-May-17Less than 30 with PAYE no. 12-16, 3A-3Z, H1-H9 or HA-HZ01-Apr-16New employer (PAYE income first payable between 1 April 2013 and 31 March 2014)01-Jul-17Less than 30 with PAYE no. I1-I9 or IA-IZ01-May-16New employer (PAYE income first payable between 1 April 2014 and 31 March 2015)01-Aug-17Less than 30 with PAYE no. 17-22, 4A-4Z, J1-J9 or JA-JZ01-Jun-16New employer (PAYE income first payable between 1 April 2015 and 31 December 2015)01-Oct-17Less than 30 with PAYE no. 23-29, 5A-5Z, K1-K9 or KA-KZ01-Jul-16New employer (PAYE income first payable between 1 January 2016 and 30 September 2016)01-Nov-17Less than 30 with PAYE no. 30-37, 6A-6Z, L1-L9 or LA-LZ01-Aug-16New employer (PAYE income first payable between 1 October 2016 and 30 June 2017)01-Jan-18Less than 30 with PAYE no. N1-N9 or NA-NZ01-Sep-16New employer (PAYE income first payable between 1 July 2017 and 30 September 2017)01-Feb-18

Staging dates cont.

Capacity Issues?

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Auto-Enrolment: The First Steps

Assess your workforce (working or ordinarily working in the UK). (HR/Legal )

Argentis can help

Determine what contribution basis will be used.

(Finance/HR)

Argentis can help

Determine what qualifying pension scheme(s) will be used.

(Finance/HR/Payroll)

Argentis can help

Establish the auto-enrolment process.

(HR/Legal/Payroll/Finance)

Argentis can help

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Assess the workforce

Earnings

16-21

22-SPA

SPA-74

Under £

5,772

Entitled worker

(£

481

pm)

£

5,772

to

£10,000

Non-eligible jobholder

(£

481

to

£833

pm)

Over

£10,000

Non-Eligible Jobholder

Eligible jobholder

Non-Eligible Jobholder

(over

£833pm) Auto Enrol?Can Opt-in/Join?Employer Contribution

Eligible jobholders

ü

ü

ü

Non-Eligible jobholders

û

ü

ü

Entitled Workers

û

ü

û

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How much will this cost?

The minimum contributions paid to a qualifying scheme is being phased in as follows:

Staging

Date

September 2017

October 2017 to

September 2018

October 2018

onwards

Total Minimum Contribution

2%

5%

8%

Employer Minimum Contribution

1%

2%

3%

Employee

Contribution

1%

3%

5%

The minimum contributions are a % of band earnings between £5,772 and £41,865 (known as, ‘Qualifying Earnings’) for 2014-15.

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TIER ONE, TWO & THREE CAN BE PHASED

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Staging

Date

to

September 2017

October 2017 to

September 2018

October 2018

onwards

Qualifying

Earnings

£5,772-£41,865

1

% employer

1%

employee

2

% employer

3%

employee

3% employer

5%

employee

Tier

1 – basic salary

2

% employer

1%

employee

3

% employer

3%

employee

4% employer

5%

employee

Tier

2 – basic salary

(85% rule)

1

% employer

1%

employee

2

% employer

3%

employee

3% employer

5%

employee

Tier

3 – total earnings

1

% employer

1%

employee

2

% employer

3%

employee

3% employer

4%

employee

Postponement of Auto Enrolment?

Postponement enables employers to delay Auto Enrolling some or all eligible employees by up to 3 months.

So if the Staging Date is 1

April

2015, Postponement can be any length of time up until 1 July 2015.

Postponement can help employers manage short-term contract or temporary

staff and those that have a ‘spike’ in earnings, or, to align with payroll processes.

Simplicity is often the

best

strategy, but

you can have

different

dates

for

different workers.

A

ll

you need to do

is send a postponement notice to each individual within 6 weeks of staging (or joining), ensuring that

all of the relevant information is included

.

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What must employers

not do?Offer Advice

Discourage Membership

Encourage jobholders to opt out

Distribute the Opt Out form

Use ‘prohibited recruitment conduct’

carries Fixed Penalty Fines ranging from £1,000 - £5,000

Create barriers to the auto-enrolment process

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Doing nothing is

not an option!Fines from the Pensions Regulator

Stage 1 – A compliance / unpaid contribution notice

Will require remedial action within set timescale

Stage

2 – Fixed Penalty of £400

Notice will include requirement to put right the breachStage

3

–

Escalating

daily

penalties

Number of Persons

Prescribed Daily Rate

1-4.

£50

5-49.

£500

50-249

£2,500

250-499

£5,000

500+

£10,00015

Auto Enrolment challenges

Dealing with initial and ongoing assessment of workforceProviding statutory notices to jobholders at Staging and each pay reference period thereafter

notice to entitled workers about the ability to opt in

n

otice to non eligible workers about the ability to opt in and receive an employer contributionnotice to eligible jobholders that they will be auto enrolledPostponement notice if applicable

Arranging payment of the contributions correctly and on time

Dealing with Opt Outs, Opt Ins

Dealing with re enrolments (every 3 years!!)

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Typical Data

Requirements for Auto Enrolment Systems

Need to consider if this information is up to date, correct and easily assessable.

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Act now (

at least 6 months before your Staging Date)?

Know your staging date

Assess your workforce

Review existing arrangements

Analyse the contribution options

Make the high level commercial decisions

contribution basis and phasing

categories of workers

Argentis can help by providing an initial workforce assessment report

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Act now (

at least 6 months before your Staging Date)?

Once the high level decisions have been made

Decide

on a suitable pension

provider

Establish processes between payroll, provider and employer to successfully deliver

AE

Employee

engagement and communication strategy

Argentis can provide advice in all these areas

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The Pensions Regulator www.thepensionsregulator.gov.uk

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The information contained within this presentation is based on our understanding of present law and HM Revenue and Customs practice, which may be subject to change. The value of any tax benefits depends on individual circumstances.

This presentation is directed at professional advisers only. It should not be distributed to or relied upon by private investors.

A recommendation to invest should not be made on the basis of this presentation alone.

The value of an investment can fall as well as rise. If investments are encashed in the early years the investor may get back less than the amount originally invested.

Argentis Financial Management is authorised and regulated by the Financial Conduct Authority. The Financial Conduct Authority does not regulate tax and trust advice.

Important Information21