Auto-Enrolment- What is actually means

1. Auto-Enrolment- What is actually means

2. From 2012for the first time, all UK employers will have to contribute towards a pension plan for their employees

3. Employer Duties – areas covered • Staging Dates • Defining the Workforce • Assessing the Workforce • Selecting a Suitable Pension • The Auto-Enrolment Process • Processing Opt –Outs • Re-enrolment • Record Keeping

4. Staging by employee number Employee No. Staging date 120,000 or more 1 Oct 2012 50,000 - 119,999 1 Nov 2012 30,000 - 49,999 1 Jan 2013 20,000 - 29,999 1 Feb 2013 10,000 - 19,999 1 Mar 2013 6,000 - 9,999 1 April 2013 4,100 - 5,999 1 May 2013 4,000 - 4,099 1 June 2013 3,000 - 3,999 1 July 2013 2,000 - 2,999 1 Aug 2013 1,250 - 1,999 1 Sept 2013 800 - 1,249 1 Oct 2013 500 - 799 1 Nov 2013 350 - 499 1 Jan 2014 250 - 349 1 Feb 2014 240 - 249 1 April 2014 150 - 239 1 May 2014 90 - 149 1 June 2014 50 - 89 1 July 2014

5. Defining the Workforce • A person is a ‘worker’ if; • they work under a contract of employment, or, • they have a contract to perform work or services personally

6. Assessing the Workforce Triggers • Staging date • First date of employment • End of 3 month ‘postponement’ period • Receipt of ‘opt in’ form • Attaining age of 22 • Earnings hurdle cleared • 3 year re-enrolment

7. Assessing the Workforce Eligible Jobholder • Aged 22 to SPA • Working in the UK • Earning above £7,475 Non-eligible Jobholder Entitled Worker • Aged 16-21 or SPA-74 • Working in the UK • Earning above £7475 • Or • Aged 16-74 • Working in the UK • Earning above £5,035 but below £7,475 • Aged 16-74 • Working in the UK • Earning below £5,035 Have the right to join / opt in Must be automatically enrolled

8. What has to happen for each category?

9. Employers must auto-enrol into a ‘Qualifying’ pension scheme • Use NEST • ‘Certify’ own existing group pension

10. How much to pay - ‘Certification’ of existing schemes Total Pay Total Pay Total Pay Pensionable Pay If more than 85% If less than 85% 8% 9% 7% Option 1 Option 2 Option 3

11. How much to pay - NEST Max £4,200 pa £38,185 £32,470 £20,000 Salary 8% Total Contribution £1142.80 8% Total Contribution £2,597.60 0contribution £7,336 £6,500 £5,715

12. Auto Enrolment Process & Timeline Auto Enrolment Date Payroll cut off 1 month joining window Employer provides information to employee and informs pension provider Postponement 3 months Opt out window No Deduction Refund Paid up membership 31st Month 1st of month 14th of month 21st of month 14th of next month

13. Opt Outs and Re-enrolment • Not available from employer • Check validity of notice • If invalid, inform why and allow 2 extra weeks • Notify Pension Scheme • Stop the deduction and payment of contribution • Refund contribution if necessary • Record • Re-enrol in 3 years

14. Record Keeping - Workers

15. Record Keeping - Pension Scheme

16. Consequences of non-compliance • It will be a criminal offence for employer not to: • set up in first place • auto-enrol • re-enrol every 3 years • make an inducement

17. Individuals not just employers • Trustees or managers of pension scheme • Payroll administrators • Accountants • Scheme administrators • Fines: • £400 Fixed penalty • Up to £10,000 per day