NMBA Best Practice Meetings 2013

Smarter. Simpler. Better. @nowpensions

Smarter. Simpler. Better.

NMBA Best PracticeMartin Olive | National Partnership Manager

November & December 2013


Agenda• Who is NOW: Pensions?• The Market• The SME and micro employer Tsunami • Your current approach• Pension Providers – “are they bothered?”• Routes to market

• The Employer Responsibilities• Advice and Charging Models• Getting to the SME Market with NOW: Pensions


• NOW: Pensions is a UK multi-employer Trust

• Supported by ATP, Denmark’s leading pension provider

• Low cost operating model

• ATP investment team

• Equiniti Paymaster administrator to 2.9m UK workers

45 years

+7.95% p.a. (average) for the last 5 years*

c£74bn FUM

* Back tested data for the UK based on ATP’s investment strategy and NOW: Pensions’ implementation strategy to 30 Sept 2012

Our achievements


4.7m members

C160,000 employers

Membership statistics


• EmployeesStaging Date

120,000 October 2012

2,000 August 2013

800 October 2013

350 January 2014

90 May 2014

30 October 2015

Staging dates can come forward too!Staging dates can come forward too!


The SME tsunami!From 1 April 2014…



Oct

-12

Nov

-12

Dec-

12

Jan-

13

Feb-

13

Mar

-13

Apr-1

3

May

-13

Jun-

13

Jul-1

3

Aug-

13

Sep-

13

Oct

-13

Nov

-13

Dec-

13

0

500

1000

1500

2000

2500

October 2012 – December 2013


Jan-14

Feb-14

Mar-14

Apr-14

May-14

Jun-14Jul-1

4

Aug-14

Sep-14

Oct-14

Nov-14

Dec-14Jan

-15

Feb-15

Mar-15

Apr-15

May-15

Jun-15Jul-1

5

Aug-15

Sep-15

Oct-15

Nov-15

Dec-15

0

2000

4000

6000

8000

10000

12000

14000

16000

January 2014 – December 2015


Jan-

16

Feb-

16

Mar

-16

Apr-

16

May

-16

Jun-

16

Jul-1

6

Aug-

16

Sep-

16

Oct

-16

Nov

-16

Dec-

16

Jan-

17

Feb-

17

Mar

-17

Apr-

17

May

-17

Jun-

17

Jul-1

7

Aug-

17

Sep-

17

Oct

-17

Nov

-17

Dec-

17

Jan-

18

Feb-

18

0

20000

40000

60000

80000

100000

120000

140000

160000

January 2016 – February 2018


Nu

mb

er o

f peo

ple

aff

ecte

dN

um

ber of em

ployers

Average of 10,000 medium size employers staging each month in April, May & July 2014

Employers staging Employees affected


From 1/4/14 - 1.2 million employers to set up schemes

If as many as 5000 advisers engage in AE =240 SMEs per adviser

10.1 million employees equivalent


• What is your approach?

• What is the pension provider approach?

• Will employers pay?The SME Tsunami

!


Routes to market…

The SME Tsunami


•Existing GPPs

•Existing HNW clients – small businesses

•Commercial and GB clients

•Telemarketing – in house/out sourced?

•Accountants and payroll bureaus

• Set up non regulated business• IFA/accountancy referrals• In association with bureaus?•Website marketing? Streamlined on boarding

OR refer for advice


Employer Responsibilities and Actions

• Pre staging date

• At staging date

• Ongoing


Some AE advice models

1. Full EBC model

2. Consult + Report + Handover

3. Implement plus use middleware

4. Consult plus install full payroll with integrated AE system


Middleware licence Direct to Employer

50p per employee per month

Payable 6 monthly in advance

3. Implement plus use middleware

Middleware licence to IFA/Accountant

£500 up front

£10 per month plus…

40p per employee per month payable 3 monthly in advance


Income Forecast (Assuming 100 employer clients with average of 6 employees each.)

Implementation income (3/4 years) 100x£600 = £60,000

Regular income from employers 100x6x£4pepm = £2,400 pm*

On-going cost of software £10pm plus 100x6x40ppepm = £250 pm

3. Implement plus use middleware*see The Pension Administrator suggested charges


Seek referral to their PAYROLL PROFESSIONAL

[See flowchart]

Recommend they use the

Implementation services of TPA and AESolved

to run alongside their payroll

Seek referral to other

Employers and/orProfessional Connections

The Employer outsources their

Payroll and wishes to outsource their

Auto Enrolment Governance

The Employer delivers their own payroll and wishes to do their own Auto Enrolment

Governance

Has the Employer already resolved their Workplace

Pension requirements

The Employer delivers their own payroll and does

not wish to do their own Auto Enrolment

Governance

Recommend the Implementation and Governance Services

of TPA

Does the Employer require Financial

Advice in relation to either an existing

scheme or the new scheme

Seek referral financial advice

Potential customer: Employer

>YES >YES >YES >YES >YES

NO > NO > NO > NO >

Implementation FeesGovernance Fees

Implementation FeesCommission on Software Fees

Financial adviceFees

> >>


Recommend Implementation and Governance Services

either direct to Employers or via

the PP

Recommend they use AESolved and outsource

Implementation services

Does the PP wish to deliver payroll but does not wish to

do the Auto Enrolment Governance

Does the PP wish to deliver a complete

payroll & Auto Enrolment service to

their clients

Has the PP already resolved a

Workplace Pension solution for their

clients

Discuss their solution and compare it to that offered by AESolved &

Governance Services

Potential customer: Payroll Professional (PP)

>YES >YES >YES

NO > NO >


Implementation FeesCommission on Software Fees

> >


Does the FA wish to provide an Auto

Enrolment service to their clients

Does the FA wish to be involved in the Auto Enrolment

opportunity

Seek referral to his Employer

clients/ PP & pay an introductory fee

Potential customer: Financial Adviser (FA)

>YES


Commission on Software Fees

>>

Recommend they use AESolved (Multi User) for Implementation & Auto Enrolment

Governance services

Employer clients – refer Employer Sales Flowchart

Payroll Professionals –

refer PP Sales Flowchart

>YES

>NO


4. Consult plus full payroll solution

AE consultation

Replace IFA payroll with new + full middleware

Implementation

Pension administration

Ongoing payroll revenue


No of Employees Contribution Per Annum

Companies Converted

Contribution

25 £300 50 £15000

50 £600 50 £30000

100 £1200 25 £30000

250 £3000 15 £45000

500 £6000 15 £90000

1000 £12000 10 £120000

Total Contribution £330000

Revenue exampleBased on a £1.00 Contribution per Employee


Why choose us to support you in the SME market?


Free middleware

No underwriting of schemes – same terms for all

We will take ALL employers

One investment fund – simple – employers prefer it

We will take 2014/15/16 staging schemes NOW (no contributions ahead of staging)

Online sign up process – IFA in charge – no wet signatures

One interface file for all payrolls – simple on boarding

NMBA Best Practice Meetings 2013

Economy & Finance

Transcript of NMBA Best Practice Meetings 2013