1. Ideal An Employers Guide to Pension Reform Financial Management Ltd. to protect & to prosper Ideal Financial Management Ltd is Authorised & Regulated by the Financial Services Authority. Reg No 209535

2. A Short History to protect & to prosper 3. Stakeholder Pensions to protect & to prosper April 2001 Govt introduced Stakeholder pensions Employers had to provide access for employees No compulsion to contribute Low take up 4. Stakeholder Pensions to protect & to prosper 1% Charge with no provision for cost of advice Limited range of funds and options No ongoing support Doomed to failure 5. Pension Reform

Starting in 2012

Phased in over 4 years

Larger companies first to join

500 fixed penalty for non-compliance

to protect & to prosper 6. Timetable to protect & to prosper Size of employer Staging date 120,000 800 Over 12 dates from 1 stOctober 2012 to 1 stOctober 2013 799 250 Over 3 dates from 1 stNovember 2013 to 1 stFebruary 2014 Less than 50 (sample) On 1st March 2014 249 50 Over 4 dates from 1 stApril 2014 to 1 stJuly 2014 Less than 50 Over 18 dates from 1 stAugust 2014 to 1 stFebruary 2016 New businesses with first PAYE income payable from 1 April 2012 Over 5 dates from 1 stMarch 2016 to 1 stSeptember 2016 7. Employer duties

From October 2012, employers will berequired by lawto:

• automatically enrol all theireligibleemployees not already in a good quality pension scheme into a Qualifying Workplace Pension Scheme (QWPS) withinthree months of becoming eligible,

and

• pay contributions for every employee who does not opt-out of the QWPS.

to protect & to prosper 8. Eligible employees

All employees will have to be auto-enrolled unless:

• they are already in a qualifying workplace pension scheme,

• they are under the age of 22,

• they are over the State Pension Age, or

• they earn less than 5,715 a year (in 2010/2011).

• Employees can only opt-out once they have been auto-enrolled.

• Non-eligible employees must be given the option of opting in to pension saving.

to protect & to prosper 9. Contribution Levels to protect & to prosper Date Total minimumcontribution %Minimum employer contribution %Minimum difference to be made up by employee % (gross) * October 2012 to September 2016 2% 1% 1% 10. Contribution Levels to protect & to prosper Date Total minimumcontribution %Minimum employer contribution %Minimum difference to be made up by employee % (gross) * October 2012 to September 2016 2% 1% 1% October 2016 to September 2017 5% 2% 3% 11. Contribution Levels to protect & to prosper Date Total minimumcontribution %Minimum employer contribution %Minimum difference to be made up by employee % (gross) * October 2012 to September 2016 2% 1% 1% October 2016 to September 2017 5% 2% 3% October 2017 onwards 8% 3% 5% 12. to protect & to prosper Options for 2012? Employersmustoffer a Qualifying Workplace Pension So what are the options? 13. to protect & to prosper NEST Or Employers own Qualifying Workplace Pension 14. NESTN ational E mployment S avings T rust

Employers who do not have, or who will not set up, their own QWPS will have the option of using NEST.

There will be certain restrictions applying to NEST:

• there will be a general ban on transfers in or out,

• there will be an upper contribution limit (currently 3,600 each year),

• limited retirement options and

• limited investment options.

to protect & to prosper 15. NEST Administered by NEST Corporation (Tata Consultancy) 0.3% Management charge1.8% Contribution charge (temporary) Default funds - Lifestyling option Low cost delivery (Internet) - Government IT System!! Only option at retirement is Annuity to protect & to prosper 16. to protect & to prosper Employers own Scheme The Government has designed simple qualifying criteria for Company Schemes: Does it permit auto-enrolment? Are eligible employees auto-enrolled within 90 days ofjoining the company? Does it have a default investment fund? Does it deliver a minimum accrual rate or minimumcontribution? 17. Employers own scheme

Salary sacrifice

Staged entry

Scheme adviser

to protect & to prosper 18.

For further details contact:-

David Patrickson Chartered Financial Planner

[email_address]

01302 880140 / 07774842165

Ideal Financial Management Ltd. to protect & to prosper