Last updated 28 April 2014 1

Employers’ Guide to

Auto Enrolment

Version 3

Last updated 28 April 2014 2

Disclaimer

This information has been prepared by Peninsula Pensions. It represents the views of

Peninsula Pensions and should not be treated as a complete and authoritative statement

of the law. Readers may wish, or will need, to take their own legal advice on the

interpretation of any particular piece of legislation. No responsibility whatsoever will be

assumed by Peninsula Pensions, for any direct or consequential loss, financial or

otherwise, damage or inconvenience, or any other obligation or liability incurred by

readers relying on information contained here. Whilst every attempt has been made to

ensure the accuracy of this guide, it would be helpful if readers could bring to the

attention of Peninsula Pensions any perceived errors or omissions.

Contents

Introduction and key points 3

Registration with the Pensions Regulator 5

Your staging date – when to act 6

Assessing your employees 7

Different types of employers

Town and Parish Councils

Community Admission Bodies

Transferee Admission Bodies

9

Opting in and opting out 13

Re-enrolment 15

Postponement 16

Transitional period 18

Employee notifications 19

Flowcharts 22

Template letters 23

Record keeping 24

Information to Peninsula Pensions 26

Checklist 27

Useful links 28

Last updated 28 April 2014 3

Introduction and Key Points From 1 October 2012, the government is introducing ‘Automatic Enrolment’. Automatic

Enrolment means that as an employer member of the Devon or Somerset Local Government

Pension Scheme (LGPS), you must automatically enrol certain members of your workforce

into the LGPS. All employers need to act to comply with the law.

These new duties on employers are to encourage more people to save for a longer

retirement.

Each employer has been allocated a date from which the changes will have to be in place –

this is known as your staging date. See The Pensions Regulator website to see which date

applies to you.

The first Devon and Somerset LGPS allocated staging date will be in February 2013.

Your staging date will be broadly based on the number of people you have in your

largest PAYE scheme in April 2012.

If you are a small employer with fewer than 50 employees your staging date won’t be

until August 2015 at the earliest.

Employers with the largest number of employees will have the earliest staging dates.

If you have any queries about Auto Enrolment, please contact: Viv Ray Pensions Project manager Peninsula Pensions Email: viv.ray@devon.gov.uk Tel: 01392 383000 ask for Viv Ray

Remember:

All employers need to act to comply with the law.

Under Auto Enrolment, eligible employees will be automatically enrolled into the

LGPS (qualifying Workplace Pension Scheme) whether they wish to join or not.

LGPS regulations require any employee under the age of 75 to be automatically

admitted to the scheme.

These eligible jobholders have a right to opt out (and if that occurs in the first three

months the employee will receive a refund of their contributions). Since April 2014

now able to receive refund if have less than 2 years service.

From October 2012 an employee will be able to opt out after they have been auto

enrolled and not before.

Anyone who has opted out of the scheme will be auto-enrolled, if they are eligible,

every three years and so must opt out every three years to stop their contributions.

Last updated 28 April 2014 4

An employer with employees eligible for the LGPS is not able to offer any other

pension scheme to their employees (see next paragraph). This means that the

Government-initiated NEST (National Employment Savings Trust) scheme is not

available to eligible LGPS employees.

An employer, such as a Town or Parish Council, who has to designate their

employees to become eligible to join the LGPS can also offer another QWPS i.e.

NEST scheme by not designating their employees. This means such an employer

can, on an individual basis, offer the employee the LGPS or another QWPS.

For Admitted Bodies, only some of their employees are eligible for the LGPS (such

as employees who have been TUPE’d from another LGPS employer). This guide

does not cover those employees that are not eligible for the LGPS.

The Pensions Regulator will write you to notify you of your staging date 12 months

and 3 months before your staging date.

Last updated 28 April 2014 5

Registration with The Pensions Regulator

All employers must register with The Pensions Regulator (TPR) within four months of their

staging date. The Pension Regulator’s website has a section on registration and what

information they require with an online registration process.

There is a registration checklist on the TPR website. Below is some of the information they

require:

Question Answer

Type of pension scheme(s) used for

automatic enrolment (personal or

occupational)

Occupational

Name and address of the pension scheme(s)

used for automatic enrolment

Local Government Pension Scheme Peninsula Pensions Great Moor House Sowton Industrial Estate Exeter EX2 7NL

Pension scheme registry number 10079150

Please note you must register with the TPR every three years on re-enrolment.

Your Staging Date – when to act

Last updated 28 April 2014 6

You will be allocated a staging date according to the the number of people you have in your

PAYE scheme on 1 April 2012. Larger employers will be the first who will need to apply the

new rules. This date will not change even if the number of employees in the PAYE scheme

changes.

Find out what your staging date is here.

If you have more than one PAYE scheme then the staging date will be decided by the

largest of the PAYE schemes. However, if a ‘small employer’ has fewer than 50 workers

and in April 2012 was part of a PAYE scheme with 50 or more workers, they can choose a

later staging date. Details of dates can be found here.

You can choose to bring your staging date forward. If you would like to do this, you must

give at least one month’s notice to the regulator by email or letter, informing them of your

new chosen date and also obtain agreement from Peninsula Pensions. Details of the

available dates are here.

For employers interested in deferring some aspects of Auto Enrolment see the sections on

postponement and using the transitional period.

Last updated 28 April 2014 7

Assessing your Employees

As soon as your staging date has arrived, you must assess your non-pensionable workforce

to find out who is eligible to be auto enrolled into the LGPS.

Here is simple table to help you assess which category your employees are in:

Age

Earnings *

16 – 21

22 – under

State Pension Age

State Pension

Age – 74

Under lower earnings threshold

(2012/13 - £5,564) (2013/14 - £5,668) (2014/15 - £5,772)

Entitled worker

2012/13 - Between £5,564 and £8,105

2013/14 - Between £5,668 and £9,440

2014/15 - Between £5,772 and £10,00o

Non-eligible jobholder

Over earnings trigger for automatic enrolment (2012/13 - £8,105) (2013/14 - £9,440) (2014/15 - £10,000)

Non-

eligible

jobholder

Eligible jobholder Non-eligible

jobholder

*Earnings: separate contracts treated separately To align with National Insurance contributions lower earnings limit To align with the PAYE threshold The Secretary of State will review the above figures each tax year It should be noted that the effective date for figures in each new tax year is 6 April. Thus, if an employer has a staging date of 1 April then to determine whether a worker is an eligible jobholder on that date the employer should use the earnings factor applicable on 1 April; but if the worker becomes an eligible jobholder on or after 6 April (e.g. on attaining age 22) the employer should use the new earnings factors that apply from 6 April.

Earnings The definition of qualifying earnings for Auto Enrolment purposes can be found in the Pension Regulators Guidance 3 – Assessing the Workforce. This is not the same as pensionable earnings on which a member pays pension contributions on.

Existing employees

As an LGPS employer, all of your employees – apart from those on a contract of less than 3

months – will already have been enrolled into the LGPS when you employed them.

Those employees who opted out of the LGPS need to be assessed to check whether they

are eligible to be auto enrolled back into the LGPS.

It is the responsibility of the individual to opt out when they are automatically enrolled.

Last updated 28 April 2014 8

Enrolling eligible jobholders on your staging date

Only jobholders who meet both of the following criteria are ‘eligible jobholders’ and must be

automatically enrolled into the LGPS on your allocated staging date (see postponement):

Eligible jobholder

Age between 22 and state pension age

AND

Earnings of (2012/13)£8,105 a year (pro rata) or

(2013/14) £9,440 a year (pro rata) or (2014/15) £10,000

a year (pro rata) This amount will be reviewed annually

by the Government.

If in the future an eligible jobholder who was brought into the LGPS by automatic enrolment

drops their pay to below the earnings trigger, they will remain in the pension scheme unless

they choose to opt out.

While female state pension ages are gradually catching up with men’s, employers will be required to calculate the individual’s State Pension Age date to assess whether they will need to be auto-enrolled. Non-eligible jobholders and Entitled workers Other categories of employees who don’t meet the above criteria can opt into the LGPS at

anytime.

Enrolling other eligible jobholders after the staging date After the initial staging date, an employee who is not a member of the LGPS because they had opted out will become an eligible jobholder when they reach one of the qualifying triggers and will be automatically enrolled into the LGPS.

New employees (contractual enrolment)

There is no change to the current procedure for admitting a new employee into the LGPS

because under the LGPS regulations all new employees are automatically brought into the

pension scheme from the start of their employment (unless they are employed on a contract

of less than three months). Those employees with contracts of less than three months will

be brought into the pension scheme:

on the member’s automatic enrolment date, or

when they have been employed for three months, or

when they opt to join at any time before then.

Whichever is the earliest.

Last updated 28 April 2014 9

Useful links on the Pension Regulators website:

The different types of worker

Employer duties and defining the workforce

Assessing the workforce

Different types of employers The majority of employers who participate in the Devon or Somerset County Pension Fund are covered by Part 1 of Schedule 2 to the Local Government Pension Scheme Regulations 2013, however there are three different types of employers who are covered by Part 2 of Schedule 2 who have slightly different options for auto enrolment, these employers are:

Designated Employers – mainly Town and Parish Councils

Community Admission Bodies

Transferee Admission Bodies The following pages gives details on how these types of employers have different choices.

TOWN AND PARISH COUNCILS (Designated employers)

Employers covered by Part 2 of Schedule 2 to the Local Government Pension Scheme

Regulations 2013. (mainly Town and Parish Councils)

These employers may, following their ‘staging date’, consider the option of ceasing to

designate new employees for membership of the LGPS. However, if they do so, they need

to consider the potential impact on their employer contribution rate resulting from a

diminishing active membership base in the LGPS and the consequences of a crystallisation

of any funding deficit should they cease at some point to have any active members of the

LGPS. Such employers who may be considering ceasing to designate new employees for

membership of the LGPS should speak with Peninsula Pensions when considering the

potential consequences.

Should such an employer decide not to offer membership of the LGPS to new employees

they will need to check their designation wording and amend as necessary e.g. to cease any

blanket designation that states that all employees are eligible for the LGPS; or all employees

within a specified class of employees are eligible for membership the LGPS; or all

employees occupying specified posts are eligible for membership of the LGPS, etc.

If, however, such an employer wishes to offer a choice of the LGPS or an alternative

qualifying scheme to new employees they would need to specify which scheme is the default

qualifying scheme into which new employees will be enrolled.

For example, the employer might specify that the alternative scheme is the default scheme

for automatic enrolment. However, if a new employee were to elect before commencement

of employment to join the LGPS instead, the employer would designate the employee,

before the first day of employment, for membership of the LGPS. The employee would thus

be contractually enrolled into the LGPS (and automatic enrolment into the alternative

scheme would not apply). If a new employee did not elect before commencement of

employment to join the LGPS then the alternative scheme would be the automatic enrolment

Last updated 28 April 2014 10

scheme. The employer could, if they wished, still permit the employee to make a subsequent

election to move from the alternative scheme into the LGPS. If the employer permits such a

move they would, upon an election being made by the employee, need to then designate the

employee for membership of the LGPS (enabling that employee to be removed from the

alternative qualifying scheme and contractually enrolled into the LGPS, which is also a

qualifying scheme).

If the employer does specify the alternative scheme as the default qualifying scheme the

employer will need to change their designation wording to provide (if it does not already so

provide) that only those individual employees who the employer designates from time to time

will be eligible for membership of the LGPS i.e. those employees who choose the LGPS in

preference to the employer’s alternative qualifying scheme will be the employees the

employer designates.

COMMUNITY ADMISSION BODIES

Employers covered by regulation 5 of the Local Government Pension Scheme

Regulations 2013.

These employers are Community Admission Bodies who participate in the LGPS under an

admission agreement. If their admission agreement:

a) is one under which they individually nominate employees for membership of the LGPS, they may consider the option of ceasing to designate new employees for membership of the LGPS, or

b) is one that is open to named posts, or is open to all employees, they may consider the option of negotiating an amendment to their admission agreement with the Pension Fund administering authority so that it becomes a closed admission agreement or provides that only new employees who the employer wishes to designate for membership will be eligible for membership.

However, the body will need to consider the potential impact on their employer contribution

rate resulting from a diminishing active membership base in the LGPS and the

consequences of a crystallisation of any funding deficit should they cease at some point to

have any active members of the LGPS. Community Admission Bodies who may be

considering either of the options above should liaise with their Pension Fund administering

authority when considering the potential consequences.

If the employer wishes to offer a choice of the LGPS or an alternative qualifying scheme to

new employees they would need to specify which scheme is the default qualifying scheme

into which new employees will be enrolled.

For example, the employer might specify that the alternative scheme is the default scheme

for automatic enrolment. However, if a new employee were to elect before commencement

of employment to join the LGPS instead, the employer would designate the employee,

before the first day of employment, for membership of the LGPS. The employee would thus

be contractually enrolled into the LGPS (and automatic enrolment into the alternative

scheme would not apply). If a new employee did not elect before commencement of

employment to join the LGPS then the alternative scheme would be the automatic enrolment

scheme. The employer could, if they wished, still permit the employee to make a subsequent

election to move from the alternative scheme into the LGPS. If the employer permits such a

Last updated 28 April 2014 11

move they would, upon an election being made by the employee, need to then designate the

employee for membership of the LGPS (enabling that employee to be removed from the

alternative qualifying scheme and contractually enrolled into the LGPS, which is also a

qualifying scheme).

If the employer does want to specify the alternative scheme as the default qualifying scheme

the employer would need to agree an amendment to their admission agreement with the

Pension Fund administering authority so it provides (if it does not already do so) that only

those individual employees who the employer designates from time to time will be eligible for

membership of the LGPS i.e. those employees who choose the LGPS in preference to the

employer’s alternative qualifying scheme will be the employees the employer designates.

TRANSFEREE ADMISSION BODIES

Employers covered by regulation 6 of the Local Government Pension Scheme

Regulations 2013.

These employers are Transferee Admission Bodies who participate in the LGPS under an

admission agreement. If their admission agreement:

a) is one under which they individually nominate employees for membership of the LGPS, they may consider the option of ceasing to designate new employees for membership of the LGPS, or

b) is one that is open to named posts, or is open to all employees, they may consider the option of negotiating an amendment to their admission agreement with the Pension Fund administering authority so that it becomes a closed admission agreement or provides that only new employees who the employer wishes to designate for membership will be eligible for membership

However, the body will need to consider the potential impact on their employer contribution

rate resulting from a diminishing active membership base in the LGPS and the

consequences of a crystallisation of any funding deficit should they cease at some point to

have any active members of the LGPS. Transferee Admission Bodies who may be

considering either of the options above should liaise with their Pension Fund administering

authority when considering the potential consequences.

It should be noted that, by virtue of the Best Value Authorities Staff Transfers (Pensions)

Direction 2007, a Transferee Admission Body with an open or closed admission agreement

that relates to a contract with a best value authority in England (listed in section 1 of the

Local Government Act 1999) or with a police authority in Wales cannot cease to offer

membership of the LGPS (or membership of a broadly comparable scheme) to the

“transferring employees” or “transferring original employees” for so long as those employees

are employed in connection with the provision of a service or assets in connection with the

exercise of a function of that authority.

Subject to the paragraph above, if the employer wishes to offer a choice of the LGPS or an

alternative qualifying scheme to employees they would need to specify which scheme is the

default qualifying scheme into which the employees will be enrolled.

For example, the employer might specify that the alternative scheme is the default scheme

for automatic enrolment. However, if a new employee were to elect before commencement

Last updated 28 April 2014 12

of employment to join the LGPS instead, the employer would designate the employee,

before the first day of employment, for membership of the LGPS. The employee would thus

be contractually enrolled into the LGPS (and automatic enrolment into the alternative

scheme would not apply). If a new employee did not elect before commencement of

employment to join the LGPS then the alternative scheme would be the automatic enrolment

scheme. The employer could, if they wished, still permit the employee to make a subsequent

election to move from the alternative scheme into the LGPS. If the employer permits such a

move they would, upon an election being made by the employee, need to then designate the

employee for membership of the LGPS (enabling that employee to be removed from the

alternative qualifying scheme and contractually enrolled into the LGPS, which is also a

qualifying scheme).

If the employer does want to specify the alternative scheme as the default qualifying scheme

the employer would need to agree an amendment to their admission agreement with the

Pension Fund administering authority so it provides (if it does not already do so) that only

those individual employees who the employer designates from time to time will be eligible for

membership of the LGPS i.e. those employees who choose the LGPS in preference to the

employer’s alternative qualifying scheme will be the employees the employer designates.

Last updated 28 April 2014 13

Opting in and opting out

Opting in

Employees who previously opted out of the LGPS can opt back in at anytime before they

reach the age of 75.

Because the LGPS allows all employees to join the pension scheme, the employee does not

have to meet the age and pay triggers to join, but does have to meet the age and pay criteria

specified to be automatically enrolled by the employer.

An opting-in notice applies from the start of the next pay period, so if you receive the opting-

in form on 11 May (for example), the employee would be brought into the LGPS from 1 June,

pay period could be weekly if applicable.

Opting out

Any employee who is a member of the LGPS, even as the result of the automatic enrolment

rules, can choose to opt out of the pension scheme at any time. If the employee opts out

within three months of joining then their pension contributions will be refunded to them

through their payroll payment. Since April 2014 if they opt out with under 2 years in the

scheme they can receive a refund of contributions via Peninsula Pensions.

An opt out form cannot be given to the employee by the employer, it must be provide by

Peninsula Pensions or can be downloaded from the website.

If the employee chooses to opt out with 2 years’ service or under with a transfer in of service,

then their pension contributions cannot be refunded, but instead they will be entitled to a

deferred benefit in the LGPS.

Once an employee has submitted a valid opt-out form within the required time period and

they have been in the pension scheme for less than 3 months:

You must arrange for a refund of the employee’s pension contributions (less tax and

any National Insurance adjustment) through their payroll system. This must happen

within one month of receiving the valid form, or if the payroll cut-off date has passed

then by the last day of the next pay period.

Your pension contributions must also be refunded to you from the pension fund,

which is usually achieved by an adjustment to your contributions the next time

payment is made to the pension fund.

A refund to the employee must not be delayed if they are waiting for a refund of

contributions from the pension fund. If necessary you must cover the cost of the

refund.

Where the contributions to be refunded span tax years this must be dealt with by payroll in

accordance with HMRC guidance (see http://hmrc.gov.uk/payerti/reporting/errors/previous-

year.htm).

If the opting-out form is received after the period when an employee can receive a refund, it

will apply from the following pay period.

Last updated 28 April 2014 14

New employees

From October 2012 the LGPS regulations were amended so that, an employee can no

longer opt not to join the LGPS before they are brought into it. Once they are in the LGPS

they are able to opt out at any time by filling in a form supplied by Peninsula Pensions or can

be downloaded from our webpages.

If an employee chooses to opt out they can rejoin at any time in the future if they are under

the age of 75. If they decide not to rejoin, they will be auto enrolled again three years after

the staging date.

If they opted out within the previous 12 months, they will be auto enrolled again at the

following three year anniversary.

* In order to for an employee, who has been issued with a Fixed or Enhanced Protection

Certificate by HMRC, to keep their protection they will need to opt out of the LGPS within

three months of joining. If they don’t do this they will lose their protection.

Important note

Employers must no longer issue new employees with an:

opting-in form (except those with a contract for less than three months) as all

employees will automatically join the LGPS when they start employment,

opting-out form as this can only be provided by Peninsula Pensions once the

employee is a member of the LGPS.

Last updated 28 April 2014 15

Re-enrolment

You must re-enrol employees (who meet the automatic enrolment triggers) not already in the

LGPS every three years from the staging date or previous automatic re-enrolment date. You

have a three month period of flexibility either side of these dates.

If at the re-enrolment date an employee had already opted out in the previous 12 months,

they won’t be re-enrolled until the following three year re-enrolment cycle.

This means that even though the employee will have opted-out – even on more than one

occasion – if they meet the required age and pay criteria, they will be brought back into the

LGPS again, but once again they can choose to opt out.

An employee who never wants to join the LGPS will continue to be brought into the pension

scheme every three years and will need to opt out each time.

Important note

Those employees who have previously opted-out and have then become an eligible

jobholder for the first time must be automatically brought into the LGPS at that time and

will not wait for the three year re-enrolment date.

Last updated 28 April 2014 16

Postponement

Auto-enrolment legislation lets an employer postpone bringing an eligible employee into the

pension scheme by up to three months. This option is only available at:

the employer’s staging date

when an employee starts employment on or after the original staging date (see

below)

when an employee first becomes an eligible jobholder.

You can choose to use postponement for all or some of your employees.

Employees on contracts of less than three months

Before an employer reaches their Staging Date

The LGPS regulations do not allow an employee with a contract for less than 3 months to

automatically join unless:

They elect to join

Their contract is amended to more than 3 months

They are still in employment for 3 months or more

includes NOMO casual employees (no mutuality of obligation).

At employer’s Staging Date and after

Those employees with contracts of less than three months will be brought into the pension

scheme:

on the member’s automatic enrolment date (this could be the Staging Date or if an

employer uses postponement then it would be after that), or when they have been employed for three months, or

when they opt to join at any time before then.

whichever is the earliest.

An eligible employee can choose to join the Local Government Pension Scheme at any time

during the postponement period.

If you choose to use postponement, you have one month from your original staging date, or

if later when the employee meets the criteria to be an eligible jobholder, to notify employees

of their postponement date.

Last updated 28 April 2014 17

No Mutuality of Obligation (NOMO)

The LGPS regulations were amended in February 2014 to allow ALL employees to join, but

an employer can use the 3 month postponement period.

You must send NOMO casual employees (those where there is no mutuality of obligation for

the employee to accept work or the employer to offer work) a postponement notice each

time they undertake work if you decide to use postponement. This is because each period of

work they are offered and accept, forms a new employment contract.

If you decide not to use postponement but the member elects to opt out of the LGPS, it will

be necessary for the member to opt out each time the employee is offered and accepts

work.

See table on next page for details of employees joining the LGPS

Last updated 28 April 2014 18

JOINERS

CONTRACTUAL OR AUTO-ENROLMENT

Before

Staging Date

Staging Date New employee

starts after

Staging Date

Existing

employee who

becomes EJH

after Staging

Date

Contract for

over 3

months

All employees

join

LGPS

automatically.

(Contractual

enrolment)

Eligible Job Holder

joins LGPS

automatically

unless

Transitional

Period being used

by employer. If

using Transitional

Period then

Eligible Job Holder

will automatically

be brought into

LGPS on 1st

October 2017.

ALL employees join

LGPS automatically

(Contractual

enrolment).

Postponement

cannot be used

Can use upto 3

months

postponement in

case of pay

‘spike’. If

postponement

not used then

must join LGPS

immediately.

Contract

under 3

months

(includes

casual &

NOMO)

Do not join

unless they

elect to join

Eligible Job Holder

joins LGPS

automatically

unless

Transitional

Period or

Postponement

being used by

employer. If using

Transitional

Period then

Eligible Job Holder

will automatically

be brought into

LGPS on 1st

October 2017.

Employees join

LGPS automatically

(Contractual

enrolment) unless

employer is using

Postponement for

upto 3 months.

Can use upto 3

months

postponement in

case of pay

‘spike’. If

postponement

not used then

must join LGPS

immediately.

Last updated 28 April 2014 19

Transitional Period

The automatic enrolment legislation allows an employer with a defined benefit pension

scheme (such as the Local Government Pension Scheme), to choose to delay automatic

enrolment for its existing eligible jobholders. The transitional period will end on 30

September 2017 regardless of the employer’s original staging date.

The assessment to be an eligible jobholder must be made on the employer’s first enrolment

date. Thus, the transitional delay cannot be applied to a worker who would normally have

earnings at a level which would place them in the category of being an eligible jobholder but

whose earnings on the employer’s first enrolment date have dropped to below the eligible

jobholder earnings trigger e.g. because of sick leave, maternity leave etc.

The transitional period delays automatic enrolment for existing eligible jobholders until after

the end of the transitional period. New employees will still need to be automatically enrolled

on starting employment.

All eligible jobholders must be informed of a transitional period delay within one month of the

employer’s original staging date. If there are no eligible jobholders at the staging date then

the employee must be informed of a transitional period delay when first becoming an eligible

jobholder.

If during the transitional period an employee who is an non-eligible jobholder or an entitled

worker meets the criteria to be an eligible jobholder for the first time, they will automatically

be brought into the LGPS.

If an eligible jobholder who was covered by the transitional period breaks their continuity of

employment, then the transitional period ends for that eligible jobholder.

You cannot choose to automatically enrol employees at an earlier date during the transitional

period.

An eligible employee can still choose to join the LGPS at any time during the transitional

period by completing an opt-in form.

Using both Postponement and Transitional Period

Some employers may wish to apply postponement and the Transitional Period for their

employees and the table below shows which timescale applies to different workers:

Postponement Transitional Period

Existing non-eligible jobholders

Existing eligible jobholders at staging date Existing entitled workers

Existing and new casual workers (those with

contracts of less than 3 months)

Link: Transitional period

Last updated 28 April 2014 20

Employee notifications

You are required to provide all employees with specific information in various possible formats. The Pensions

Regulators website provides comprehensive details of their requirements. The table below attempts to consolidate this

information

Employee Type Timescale Letter format Information required (see template letters)

Existing LGPS members

When automatic

enrolment is repeated

every three years, no

further notification is

required

Within two months

of your staging

date

Can use

Letter

Personal email

Payslip

HR web-portal

Cannot use

Non-personal email

Workplace poster

Internet/intranet site

Notification must include Dear Member or member’s actual name

Confirmation that the jobholder is an active member of the LGPS

A statement that if the jobholder ceases membership of the LGPS through no fault of their own, that the employer will enrol them into another automatic enrolment scheme

Where to obtain further information about pensions and saving for retirement

New LGPS members

includes eligible

jobholders

When automatic

enrolment is repeated

Within one month

of your staging

date, or the

employee’s first

day of

employment, or

Can use

Letter

Personal email

Payslip

HR web-portal

Cannot use

Notification must include Personal address (‘Dear Mrs Smith’, for example)

Confirmation that they have been or will be automatically enrolled in the LGPS to help them save for their retirement

Automatic enrolment date

Contribution rate percentage applicable to employee

Statement that pension contributions payable to the scheme

Last updated 28 April 2014 21

every three years, further

notification is required

when the employee

first becomes an

eligible jobholder

Non-personal email

Workplace poster

Internet/intranet

site

have been or will be deducted from employee’s pensionable pay

Confirmation that employee will receive tax relief on their pension contributions, if tax payer

How to opt out and also how to opt back in

Opt-out form must not be provided by employer, but instead is given to the employee on request from Peninsula Pensions

Employee cannot opt out until they have joined the LGPS, any opt-out forms received before the date the employee has joined the LGPS will be invalid

If you have chosen to use the transitional period to defer your staging date then you must inform those eligible workers of this decision

A statement about where to find further information about pensions and saving for retirement

Employees not eligible

for auto enrolment

Non-eligible jobholders

and entitled workers

When automatic

enrolment is repeated

every three years, no

further notification is

required if they continue

to be non-eligible

jobholders or entitled

workers

Within one month

of your staging

date or when they

first become a non-

eligible jobholder or

entitled worker

Can use:

Letter

Personal email

Payslip

HR web-portal Cannot use:

Non-personal email

Workplace poster

Internet/intranet site

Notification must include

Addressed personally (‘Dear Mrs Smith’ for example)

How to opt in and also how to opt out

Where to obtain opt-in forms

Opt-out form must not be provided by you, but instead is given to the employee on request from Peninsula Pensions

Employee cannot opt out until they have joined the LGPS. Any opt-out forms received before the date the employee has joined the LGPS will be invalid

Where to obtain further information about pensions and saving for retirement

Last updated 28 April 2014 22

Mandatory information to

be included in the

employee notice for the

transitional period for

defined benefit scheme

(LGPS)

Within one month

of your staging

date

Notification must include

A statement that you intend to defer automatic enrolment for that jobholder until the end of the transitional period

A statement that the jobholder may, by giving written notice to you, require the employer to make arrangements for them to become an active member of an automatic enrolment scheme (LGPS) and that you will make contributions

A statement that a written notice from the worker must be signed by the worker or, if it is given by email, must include a statement that the worker personally submitted the notice

A statement about where to find further information about pensions and saving for retirement

Link: Information to Workers

Last updated 28 April 2014 23

Flowcharts

There are seven flowcharts available to help you decide what you need to do for employees

in different circumstances. They provide details of timescales and template letters with

suggested wording.

1 Existing workers your staging date with a contract for three months or more (including

casuals with open-ended contracts)

1a Existing workers who are members of the LGPS on the Employer’s Staging Date

and who subsequently opt out of membership of the LGPS

2 Existing eligible jobholders on your staging date who are not active members of the

LGPS and the employer wishes to apply the transitional delay period.

3 Existing workers on your staging date with a contract for less than three months

(including NOMO casuals)

4 New workers on or after the employer’s staging date with a contract for three months

or more (including casuals with open-ended contracts)

5 New workers on or after the employer’s staging date with a contract for less than three

months

6 Workers whose contract are extended to three months or more

You can find the above flowcharts on the Peninsula Pensions website. Please go to auto-

enrolment section in the employers’ section of the site.

Please note that the following qualifications apply to those boxes in the flowcharts that

contain asterisks:

* unless the eligible jobholder had opted out within the previous 12 months

** but the employer may choose to remind the person that they can opt into the LGPS if they

wish.

Last updated 28 April 2014 24

Template Letters

Attached is an index of eleven template letters which you can use to provide required

information to your employees:

Letter

A

Issue to workers who, on your staging date, are already members of the

LGPS.

Letter

B

Issue to eligible jobholders who, on your staging date, are not already

members of the LGPS.

Letter

C

Issue to non-eligible jobholders and entitled workers who, on your staging

date, are not members of the LGPS and have a contract for three months or

more.

Letter

D

Issue to workers who, after they start employment, and after the employer’s

staging date:

become a non-eligible jobholder or an entitled worker for the first

time

are not members of the LGPS

and have a contract for three months or more.

Letter

E

Issue to workers who, after they start employment, and after your staging

date, opt to join the LGPS under the automatic enrolment duties.

Letter

F

Send to employees contractually enrolled into the LGPS.

Letter

G

Send to employees contractually enrolled into the LGPS when their initial

contract for less than three months is extended to three months or more.

Letter

L

Send to employees who opt to join the LGPS during the postponement or

transitional delay periods

Letter

P

Issue to workers who have a contract for less than three months (including

NOMO casuals) for whom you wish to postpone the automatic enrolment

duties.

Claim

P

Information provided on claim form/timesheet for NOMO casual employees

where you wish to postpone the automatic enrolment duties.

Letter

T

Issue to existing eligible jobholders who, on your staging date, are not

contributing to the LGPS, and you have decided to apply the transitional

delay period.

You can find the above letters on the Peninsula Pensions website. Please go to auto-

enrolment section in the employers’ section of the site.

Last updated 28 April 2014 25

Record Keeping

Employers must keep records about their workers to be made available to The Pensions

Regulator on request.

You may ask your outside payroll provider to keep the required records, but it will be your

responsibility to make sure that the required information is held.

Records an employer must keep about jobholders and workers

Who the record is

about What record must be kept

How long it

must be

kept

Jobholders and

workers who become

members

Name

NI number if known

Date of birth

Gross earnings in each relevant pay reference period

Employee and employer pension contributions relevant to each pay period payable to the LGPS

Date contributions were paid to the scheme 6 years

Additional information

for jobholders only

Automatic enrolment date

Opt-in notice (original format) (photocopies/electronically stored are acceptable)

Opt-out notice (original format)

(photocopies/electronically stored are

acceptable)

4 years

Additional information

for workers only

Date the worker became an active member of LGPS

Joining notice (original format) (photocopies/electronically stored are acceptable) 6 years

All workers for whom

the employer has

used postponement

Name

NI number if known

Date the notice was sent to the worker

Last updated 28 April 2014 26

Records an employer must keep about the pension scheme

Type of pension

scheme being used What record must be kept

How

long it

must be

kept

Defined benefit (DB)

LGPS

Employer pension scheme reference

Scheme name and address

Scheme contracting-out certificate

6 years

Link: Record Keeping

Last updated 28 April 2014 27

Information to Peninsula Pensions

New Starters

For each eligible jobholder who is being automatically enrolled, you must give the Peninsula Pensions (trustees, managers or providers of the pension scheme), the following information about the eligible jobholder within one month (joining window) of the employee joining the LGPS:

Name

Sex

Date of birth

Automatic enrolment date

Postal residential address

National Insurance number. If not known the employer must provide the NI number

to Peninsula Pensions at a later date, and within one month of receiving it

Work email address (if one exists)

Personal email address (if known)

Gross pensionable earnings

Pension contribution rate

Auto Enrolment category of worker

Opt outs

When an employee opts out of the LGPS the employer is required to notify Peninsula

Pensions within 1 month.

There is a template opt out spreadsheet on our website for the employer to email to

Peninsula Pensions each month.

Last updated 28 April 2014 28

Checklist

You must register with The Pensions Regulator within 4 months of your staging date

/ re-enrolment date.

You must make the following decisions before your staging date:

o Will the transitional period be used to delay bringing in your ‘eligible

jobholders’ until October 2017?

o Will the postponement period of up to three months be used?

You must carry out an assessment of your workforce on one of the following dates

(whichever is the latest):

o start of employment providing employer has not chosen postponement

o staging date or postponement date

o start and end of transitional period if employer has chosen to use this facility

You must continue to carry out an assessment of their workforce on the first day of

the pay period in case they meet the criteria to be an eligible jobholder.

During the employee’s ‘joining window’ (the one month period from the eligible

jobholder’s automatic enrolment date) you must:

o supply information to Peninsula Pensions about new joiners

o supply information to new LGPS members

o ensure eligible jobholder’s are admitted to LGPS

At the staging date you must send:

o information to those already in the LGPS o information to eligible jobholders being brought into the LGPS o information to non-eligible jobholders (and entitled workers if you want to)

about the choice to join o information about postponement of staging date by up to three months to

those not in the LGPS o information about using the transitional period up to 30 September 2017 to

those not in the LGPS

Before the staging date amend claim forms/timesheets for NOMO employees if you decide to provide postponement information on completion of these forms.

Last updated 28 April 2014 29

Useful links

Beginners’ guide to auto enrolment for employers

This is a very useful guide for employers who are beginners to auto enrolment

http://www.thepensionsregulator.gov.uk/employers/beginners-guide-to-auto-

enrolment.aspx

Seven steps to prepare for automatic enrolment

The main steps an employer needs to take to fulfil the employer duties

www.thepensionregulator.gov.uk/employers/7-steps.aspx

Detailed guides for employers (and pension professionals) by volume

www.tpr.gov.uk/pensions-reform/detailed-guidance.aspx

What information do employers need to provide to their workers?

www.thepensionregulator.gov.uk/docs/Pensions-reform-resource-information-to-

workers.pdf

Detailed guides for software developers

http://www.thepensionsregulator.gov.uk/professionals/software-developers.aspx

Employer communication material jointly from DWP and The Pensions

Regulator

http://www.thepensionsregulator.gov.uk/workplacepensions.html

Local Government Pensions Committee employers guide

http://www.lge.gov.uk/lge/core/page.do?pageId=17995528