Hertfordshire Employers Workshop Automatic Enrolment

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Transcript of Hertfordshire Employers Workshop Automatic Enrolment

  • Hertfordshire Employers Workshop

    Automatic Enrolment

  • Background

    What is Automatic Enrolment?

    Why has it been introduced?

    What is different to the current system for LGPS and Teachers Pension Agency (TPA)?

    Can I leave it to the pensions people?

  • When does it apply fromAutomatic Enrolment is effective from your staging date:

    Why has the Government given employers different staging dates?Do you know your staging date?If not do you know how to find out your staging date?

  • Decisions each employer must make

    Are you going to use transitional delay?

    Are you going to use postponement?

    Who is going to issue letters and communications to staff?

    Who will change the recruitment process?

    Who is going to register with The Pensions Regulator when you have passed your staging date?

  • What we can do to support you?

    Important to realise that Automatic Enrolment is anemployers issue.

    Suggested wording for letters;Posters and communication documents; and

    Experts (staff who have lived through the process previously).

  • Typical Problem Employees

    Casual employees;Consultants;Councillors; andMaternity leave.

    An example below employer staging date 1/4/13 recruits a new employee 1/5/13 on her 21st birthday

    1/5/13 - Brought into scheme under scheme rules (opts out)1/5/14 - Auto enrolled at age 22 (opts out)1/5/15 - Goes on nil pay on trip of lifetime/maternity leave1/10/15 - returns to full pay so is auto enrolled (opts out)1/4/16 - Third year anniversary of staging date so is auto enrolled (opts out)

    Complaints?????

  • Problem EmployersEmployers with multiple schemes:

    Teachers and Local Government; Lots of casual employees;

    Multiple payroll providers;

    Local Government plus defined contribution schemes; and Employer where the Local Government scheme is a closed fund.

  • Suggested Timetable

    I have a little spread sheet to help employer keep track of communication requirements.

    Staging date;

    General steps to consider;

    Split between if you use transitional delay or not; and Responsibility.

  • Good News

    Reasons to be cheerful

    The LGPS is a qualifying scheme;

    Other employers have gone through the process;

    Current practise complies with the majority of the requirements; and Electronic opt out route being prepared;

  • Bad News

    Reasons to remain vigilant

    I stress it is the employers decision on who to AE and ultimately the Pension Regulator has the powers to fine employers who do not comply with their requirements;

    There will be upset staff/complaints; and

    The administration will be a pain.

  • SummaryEmployers issue;

    Employer cannot issue any opt out forms;

    Need to repeat every 3 years;

    LPFA can offer assistance; and

    There will be complaints.

  • Thank youContact details:

    Neil LewinsTechnical Officer0207 369 6066neil.lewins@lpfa.org.uk

    *

    .

    AE is the process the Government plan to increase the number of people in employment are saving for their retirement, following a process set up in Australia, New Zealand and USA (it could become compulsory if the take up is not sufficient).The Government is concerned whether the future generation of pensioners could be in a cycle of poverty with further demands on the public purse. Employers are required to contribute in addition to members with minimum contributions being 3% by employee and x% for the employerThe current system where all employees are brought into the scheme but the employer supplies details on the option to opt out (this is removed as less scrupulous employers may wish to encourage theme staff to opt out therefore saving them money). Most employers are happy to amend the process for new staff for all new recruits rather than run 2 approach'sNo- the employer has significant responsibilities set out and tPR holds the employer responsible should there be a breech in the requirements (should be unlikely but we need to guard against inspections or malicious complaint) The Government decided to use a staggered approach with largest employers going first with the go live date set depending on the size of your PAYE.

    If you do not know your staging date at www.tpr.gov.uk/staging but in general if you have greater than 1000 employees before October 2013Between 500 and 1000 between October and November 2013Between 250 and 500 between November 13 and April 14Less than 250 after new scheme comes into forceReasons you may wish to use TD: Admin, save funds, avoid winding up staff who have already expressed a wish not to join the pension arrangementsReasons not to use TD: in the long term complicates the picture, not in the members best interestReasons to use postponement if you have lots of casual staff, Reason not to use postponement- treat all employees the same, extra work if using postponement Frequently asked questions10 reasons to join the scheme

    My little excel spreadsheet is based on my thoughts only and you may feel you need longer is you anticipate problems with setting out your needs with payroll providers or have other areas that might need to be involved for communications.