Automatic enrolment duties and assessing the workforce. Susannah Hines Customer propositions manager Neil Esslemont Head of large employer communications March 2012. Workplace pension reform and DWP, TPR and NEST remit.
Automatic enrolment dutiesand assessing the workforce
Susannah HinesCustomer propositions manager
Head of large employer communications
DWP – Policy owner and responsible for policy and for enabling and co-ordinating activity for the programme – and for communications to workers.
The Pensions Regulator – independent regulator responsible for delivering a proportionate compliance regime and for communicating the duties to employers, intermediaries and providers.
NEST (National Employment Savings Trust) Corporation – is a pension provider available to all employers who want to use it.
NEST has been designed to complement existing provision.
NEST has a Public Service Obligation and operates independently of the DWP and TPR.
Know your staging date – when to act
Assess your workforce
Choose a pension scheme for automatic enrolment
Communicate the changes to all your eligible workers
Automatically enrol your eligible workers
Register with The Pensions Regulator
Contribute to your workers’ pensions
Assessing the workforce
Head of large employer communications
The physical location of the employer or worker is not a determining factor (eg the employer may be based outside of the UK).
However, the worker needs to be “ordinarily working” in the UK (excluding the Channel Isles and Isle of Man).
Each employer needs to make a reasonable judgement for each worker, based on their contract and/or actual working patterns:
Are they currently working outside the UK, but “ordinarily working” in the UK?
Are workers seconded from overseas to the UK, not “ordinarily working” in the UK?
In addition, the following people are not classified as workers:
An office-holder (eg non-executive director, trustee, elected member);
Any serving member of the Crown naval, military or air forces (or cadets);
An individual who is the only employee in a company of which they are also a director.
‘Qualifying earnings’ is a reference to earnings of between £5,035 and £33,540† made up of any of the following components of pay that is due to be paid to the worker:
•statutory sick pay
•statutory maternity pay
•ordinary or additional statutory paternity pay
• statutory adoption pay.
† These figures are for the year 2006-2007. The Secretary of State will review this amount each tax year and is expected to change this figure in early 2012.
NB: These figures will change over time. The Pensions Bill 2011 proposes that the earnings trigger is set at £7,475 and the lower level of qualifying earnings is set at £5,035 for 2011-2012. The Bill also includes the power for the Secretary of State to review the amount each year and the review is expected to change the amounts in early 2012.
† Based on ‘Qualifying earnings’, but calculated pro-rata for Pay Reference Period. These figures are for the year 2006-2007. The Secretary of State will review this amount each tax year and is expected to change this figure in early 2012.
* SPA = State Pension Age
¥ Who work, or ordinarily work, in the UK (excluding the Channel Isles and Isle of Man)
‘7 steps to prepare for automatic enrolment’The main steps an employer needs to take to fulfil the employer dutieswww.tpr.gov.uk/employers/7-steps.aspx
Detailed guides for employers (and pension professionals) by volumewww.tpr.gov.uk/pensions-reform/detailed-guidance.aspx
What information do employers need to provide to their workers? www.tpr.gov.uk/docs/Pensions-reform-resource-information-to-workers.pdf
Detailed guide for software developerswww.tpr.gov.uk/pensions-reform/software-developers.aspx