Upload
oswin-french
View
215
Download
0
Tags:
Embed Size (px)
Citation preview
Auto-enrolmentThe facts made simple
Are you in … control?
Agenda• About Carey Pensions UK
• Auto-enrolment – The facts, the opportunity, your options
• Auto-enrolment – Compliance solution
• Auto-enrolment – Qualifying Workplace Pension
• Summary
• Q&A’s
About Carey Pensions UK
About us• Carey Pensions UK is an independent provider of specialist pensions
administration
• Carey Pension Trustees UK Limited is an independent professional trustee of
pension schemes
• Part of a larger group that has been established for 40 years
• Share holders of the group are ten partners of one of the largest international
law firms
in the Channel Islands, Carey Olsen
• Carey Group administers over 25,000 members pensions across a range of
individual and company schemes
• Carey Group administers in excess of £1 billion pension assets and over
$18billion assets across the Group
• Carey Pensions UK is an award winning company for its customer service
provision
• Customers are at the heart of all that we do
• Committed to the delivery of quality products and services
Why is auto-enrolment happening?• People are living longer
• Retirement is under-provided for
• Minority of British adults contribute to a personal pension plan
• The government is compelled to take action
• Auto-enrolment is introduced to the UK to encourage all to save for their
retirement
A successful modelAuto-enrolment has been inspired by successful models in both Australia and New Zealand; Superannuation schemes and the Kiwisaver.
In the USA the take up rate of workplace pensions rose from 52% to 82% with the introduction of auto-enrolment in 2009.
What is auto-enrolment?• A new law by the government designed to help people save more for their retirement
• Companies are obliged to auto-enrol their employees into their scheme between October 2012 & February 2018 depending upon the number of employees in the company – “staging dates”
• There is a Qualifying Workplace Pension minimum criteria requirement that companies need to meet:
- Permit automatic enrolment- Automatically enrol employees within three months of joining the
company- Have a default investment option- Meet one of the minimum contribution tests- Meet one of the minimum contribution levels
It is primarily compliance and adhering to legislation
The basics and who qualifiesAn employee must be automatically enrolled if they meet the following criteria:• are not already active members in a Qualifying Workplace Pension• are at least 22 years old• are under the state pension age• earn more than £10,000 annually (this figure will be subject to change)• work or regularly work in the UK
After being enrolled an employee will have the option to opt out, but can choose to opt back in after 12 months.
Employers are legally required to re-enrol any employees who have chosen to opt out, and have not yet opted back in, every three years from the date of original enrolment.
Assessing Workers
Eligible Jobholders – Must be auto enrolled with employer contributionsAged between 22 and SPA, earn above £10,000
Non Eligible Jobholders - Have the right to opt in with employer contributionsAged between 16-21 or SPA-74, earn above £10,000Or Aged 16-74, earning above £5,772 but below £10,000
Entitled Workers – Have the right to join but the employer doesn’t need to contributeAged16-74, earn below £5,772
Minimum contribution tests for Money Purchase, Stakeholder and Group Personal Pension(GPP) schemes paid by companySTANDARD TEST ALTERNATIVE CONTRIBUTION TESTS
Minimum contribution of 8% of qualifying earningsWith at least 3% paid by company
TIER 1Contributions are at least 9% of pensionable pay*(4% minimum employer contribution) orTIER 2Contributions are at least 8% of pensionable pay* (3% minimum employer contribution) and, on average, pensionable pay is at least 85% of total pay, orTIER 3Contributions are at least 7% of total earnings (3% minimum employer contribution)
* The pensionable salary must be equal or more than basic pay.
Minimum contribution levels
DATE EMPLOYER CONTRIBUTION
EMPLOYEECONTRIBUTION
TOTAL CONTRIBUTION
October 2012 to September 2017
1% 1% 2%
October 2017 to September 2018
2% 3% 5%
October 2018 onwards 3%5%
(includes basic rate tax relief)
8%
Contributions in Australia are now 12.5% employer and 12.5% employee
Risks of non-complianceIt is important that employers understand the risks to them with whatever Qualifying Workplace Pension and/or auto-enrolment solution they choose. If the company is found non-compliant there is a risk of FINES. The fines are related to the number of staff in the company.
Fines will be levied where companies:• Fail to register with the regulator• Offer their employees incentives to
opt-out of joining the pension scheme• Fail to meet their monthly contributions
1-4 £50
5-49 £500
50-249 £2,500
250-499 £5,000
500 plus £10,000
NUMBER OF STAFFIN THE COMPANY
PRESCRIBED DAILY RATE FOR COMPANY
FINE
Staging dates
EMPLOYEES STAGING DATES
6000-9999 April 2013
4100-5999 May 2013
4000-4099 June 2013
3000-3999 July 2013
2000-2999 August 2013
1250-1999 September 2013
800-1249 October 2013
500-799 November 2013
350-499 January 2014
250-349 February 2014
160-249 April 2014
EMPLOYEES STAGING DATES
90-159 May 2014
62-89 July 2014
61 August 2014
60 October 2014
59 November 2014
58 January 2015
54-57 March 2015
50-53 April 2015
40-49 August 2015
30-39 October 2015
Fewer than 30 from June 2016
Auto-enrolment opportunity
In 2014 in the UK
38,000 employers (36,000 in the first 6 months of this year)
4.9 million employees
Alternative Options
NEST, NOW, People’s Pension Payroll Companies
Competitive pricing SAGEAimed at low to moderate earners IrisLimited investment choice CeridianDon’t all have an end to end solution ADPSimple application process MorepayNEST must accept all applications
Insurance Companies
Competitive pricingFamiliar brandEnd to end solution‘Cherry pick’ cases or strict acceptance criteriaBundled solution
Workplace PensionAuto-enrolment System
Regulator compliant
Bespoke portal Compliance
HR/Payroll interfaces
Workforce assessment Member communication
Record keeping
The Carey Auto-enrolment System – making it
simpleOverview
Auto-enrolmentOur specialist auto-enrolment portal team
will demonstrate the system functionality
• Pension schemes with multiple sections
• Assessment of scheme and sections
• Assessment of workers
• Enrol eligible jobholders
• Opt-in and out
• Electronic correspondence
• Reports/outputs
Regulator
Providers
Management Information
Carey Pensions UK auto-enrolment systemKey features
• Reduced employer administration costs
• Reduced employer administration resource
• Provision of own branded auto enrolment portal
• Fully functional fully compliant auto enrolment portal
• Automatic upgrades to the auto enrolment portal
• Full training on auto enrolment portal
• Full technical manual
• Access for employers
• Access for employees
• Technical support to employer
Implementation Process
• Training provided via webinar
• Fact find completion
• URL built by Carey Pensions UK
• Log ins sent to the employer and training provided via adviser or webinar
The Workplace PensionMaking it simple
Building bespoke pension solutions for corporate clients
The unbundled approach
The Carey Workplace Pension Trust
The Carey Group SIPP
Carey Pensions UK establishment responsibilities
Carey Pensions UK administration responsibilities
White labelling
The unbundled approach• ‘Best of breed’ independent partners• Industry specialists• Building bespoke solutions• Greater control• Ease of management• Pro-active monitoring and review• Working together for the future• Added value employee benefit
Building bespoke pension solutions for corporate clientsEach companyis different
Investment options can be tailored and pro actively managed
Implementation• Provide company ID and complete a 3 page application form
• CPUK create the Deed of Participation (DoP)
• Employer signs the DoP. The adviser returns this to CPUK along with adviser fee scheduleand Investment recommendation report (if outside the default)
• CPUK register the scheme with HMRC and TPR, coordinate with the investment house and HR/Payroll ready to collect 1st months contributions
Price for Employers with 50+ EmployeesAE System The Workplace Pension
£500 plus VAT one off set up fee £1000 plus VAT one off set up fee
£1.50 plus VAT per employee per month 0.75% AUM plus £1 per member per
month
TOTAL: £1500 plus VAT set up, £2.50 per employee per month, 0.75% AUM
How Can the Adviser Make Money?Example Adviser Charging: £3500 implementation fee = £2000 margin
£3.50 per employee per month = £12 per employee margin
Example: 1 Adviser Firm, 5 Consultants, 20 employers per consultant, 60 employees per
employer
20 employers x £2000 = £40000 x 5 consultants = £200000
20 employers x 60 employees x £12 = £14400 x 5 consultants = £72000
TOTAL: £272000
Price for Employers with less than 50 EmployeesAE System The Workplace Pension
£500 plus VAT one off set up fee £500 plus VAT one off set up fee
£1.50 plus VAT per employee per month 0.75% AUM plus £1 per member per
month
TOTAL: £1000 plus VAT set up, £2.50 per employee per month, 0.75% AUM
How Can the Adviser Make Money?Example Adviser Charging: £3000 implementation fee = £2000 margin
£3.50 per employee per month = £12 per employee margin
Example: 1 Adviser Firm, 5 Consultants, 20 employers per consultant, 25 employees per
employer
20 employers x £2000 = £40000 x 5 consultants = £200000
20 employers x 25 employees x £12 = £6000 x 5 consultants = £30000
TOTAL: £230000
Summary• Auto-enrolment is here – employers MUST take action!• Employers who delay are at risk of huge daily fines• From February 2014 there will be limited resource – providers will be selective, costs will rise,
fines will be charged• Compliance is time consuming and an on-going responsibility• With 8%+ contributions, employees deserve to feel engaged in their retirement plans• Employers should have flexibility and control• One size does not fit all• We’re here to help• Don’t delay!!