Workplace pensions pension auto-enrolment an employers guide from The Legal Partners

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A guide and 7 point plan to enable employers to comply with the new Workplace Pensions and Auto-Enrolment. Know your staging dates, what to do next, how to plan for Auto-Enrolment and how to get employees on board.

Transcript of Workplace pensions pension auto-enrolment an employers guide from The Legal Partners

  • 1. Workplace Pensions All in.. but into what exactly ?? Your 7 Point Plan How to comply Make it work for your business Avoid big penalties Get staff on side Richard MullettRichard.Mullett@TheLegalPartners.comEMPLOYMENT & BUSINESS LAWYERS10208 334 8049W W W . T H E L E G A L PA R T N E R S . C O M

2. Pension Auto-Enrolment = Workplace Pensions1 How your business is affected 2 7 Point Plan 3 Battle Stories & Practical Tips 4 Fixed Price servicesEMPLOYMENT & BUSINESS LAWYERS2W W W . T H E L E G A L PA R T N E R S . C O M 3. Pension Contributions Gross earnings: Salary, Commission, Bonus, Overtime, Sick Pay, Statutory Maternity Pay between 5,668 and 41,450 DateEmployer minimum contributionTotal minimum contributionEmployer's staging date to 30 September 20171%2%October 2017 to 30 September 20182%5%1 October 2018 onwards3%8%EMPLOYMENT & BUSINESS LAWYERS3W W W . T H E L E G A L PA R T N E R S . C O M 4. Cebr - 15bn cost over next 5 yearsCentre for Economics Business ResearchPension contributions: 11.6 billion over next 5 years. Set-up costs: average: 8,900 for small businesses (4 or less employees) 12,600 for SMEs. Planning & Preparation time: "up to 103 man days" Ongoing administration tasks: upto 3 days a month for some companies. EMPLOYMENT & BUSINESS LAWYERS4W W W . T H E L E G A L PA R T N E R S . C O M 5. 7 Point Plan 9 Months 1 Know your Staging Date & Nominate a Contact 2 Assess Your Workforce & Develop a Plan 3 Review Pension Plans, Employment Contracts and Staff Handbooks & Select Advisers 4 Communicate to your workers 5 Automatically enrol eligible jobholders 6 Register with the Pensions Regulator & keep records 7 Contribute to your workers scheme + what also to doEMPLOYMENT & BUSINESS LAWYERS5W W W . T H E L E G A L PA R T N E R S . C O M 6. 1 Know your Staging Date & Nominate a Contact Employer SizeEnrolment Date250+ 50 to 249+ 30 to 49 members Less than 30 Remaining & New employers1 Oct 2012 to 1 Feb 2014 1 April 2014 to 1 April 2015 1 August 2015 to 1 Oct 2015 1 Jan 2016 to 1 April 2017 1 April 2017 onwardsPostpone Start for 3 Months but ..staff can ask to opt in during this 3 month period HMRC records. Do not assume correct! Go to http://www.thepensionsregulator.gov.uk/employers/tools/staging-date.aspx. Nominated Contact gets reminders from the Pensions Regulator to stay on track! Get your business registered!EMPLOYMENT & BUSINESS LAWYERS6W W W . T H E L E G A L PA R T N E R S . C O M 7. 2 Assess Your Workforce & Develop a Plan Look at who is: eligible 9,440 per year Eligible Salary = auto enrol + 1% employer & 2% employee pension contribution non-eligible may opt in & enrol + 1% employer & 2% employee pension contribution not eligible right to join but no right to employer contribution Work out likely employer contributions: Involve CEO & CFO, HR, Accountants and Lawyers Cashflow planning & Set up and running budget HR Communication at the right time of year Register on line start the process. Avoid last minute rush EMPLOYMENT & BUSINESS LAWYERS7W W W . T H E L E G A L PA R T N E R S . C O M 8. Over 90% - Stay In Over 90 per cent of people who have been placed into a workplace pension by their employer are staying in. Department for Work and Pensions (DWP) 8 August 2013 50 biggest employers - on average just 9% opt out. Previously: DWP research showed 30% were likely to opt out. Why? More under 30s staying in a pension scheme than other age groups. EMPLOYMENT & BUSINESS LAWYERS8W W W . T H E L E G A L PA R T N E R S . C O M 9. 3 Select Advisers, Review Pension Plans, Employment Contracts & Staff HandbooksWho is a worker? Employees (full & part-time etc), Contractors, Agency staff? If workers are eligible, you need a pension plan Use existing pension plan? If it complies use it If not need new scheme Give a copy of new pension scheme to workers Change employment contracts & Staff Handbooks EMPLOYMENT & BUSINESS LAWYERS9W W W . T H E L E G A L PA R T N E R S . C O M 10. 4 Communicate to your workers Raise awareness newsletters, posters Regular communication Less take home salary but pension benefit Write 1 month before implementation date minimum! Template lettersEMPLOYMENT & BUSINESS LAWYERS10W W W . T H E L E G A L PA R T N E R S . C O M 11. 5 Automatically enrol eligible jobholders At the Staging Date double check who automatically enrols & who could opt in. 1 month to enrol. Give pension scheme provider all the details so the pension scheme makes the investments. Start making 1% monthly contributions No inducements allowed to opt out. Breach of the law.EMPLOYMENT & BUSINESS LAWYERS11W W W . T H E L E G A L PA R T N E R S . C O M 12. 6 Register with the Pensions Regulator & keep records 4 months from the Staging Date Notify: the name of the pension scheme provider + unique Employer Pension Scheme Reference No or NEST ID How many workers and how many enrolled CEO details Get Government Gateway ID code & unique letter code from the Pensions Regulator EMPLOYMENT & BUSINESS LAWYERS12W W W . T H E L E G A L PA R T N E R S . C O M 13. Keep Records Staff & pension scheme: names and addresses of staff automatically enrolled contributions payable to the pension scheme and when they were paid any opt-in or opt-out notices you receive name and address of the pension scheme employer pension scheme reference or pension scheme registry number. Storage and Access Good governance and proof of compliance with your duties. Keep for 6 years EMPLOYMENT & BUSINESS LAWYERS13W W W . T H E L E G A L PA R T N E R S . C O M 14. 7 Contribute to your workers scheme Deduct and pay regular contributions Process Opt outs Processing opt ins Processing opt-in requests Regularly monitor ages and earnings as this affects workers Pay rises Joiners & Leavers EMPLOYMENT & BUSINESS LAWYERS14W W W . T H E L E G A L PA R T N E R S . C O M 15. Battle Stories & Practical Tips What not to do v What to do 1 Check with Payroll & Pension providers - plan and get costings and select right supplier 2 Test dummy run 3 months before with named Directors 3 Do not think that postponing by 3 months solves all the issues. 4 Use the 3 month waiting period before new joiners enter to your advantage (eg after 3 month probationary period). 5 Communicate with the workers! 6 Correct Staff records. Format data for pension provider. 7 Look out for 25 Nov 13 Automatic enrolment: annual evaluation report & Government campaigns this will raise awareness even more! 8 Pension Providers & NEST pros and cons. Cost effective automated solution. EMPLOYMENT & BUSINESS LAWYERS15W W W . T H E L E G A L PA R T N E R S . C O M 16. HR & Employment & Business Law Issues Existing workers Changing Employment Contracts its a package. Sell the benefits. Staff Handbooks Outsourcing Contracts with Advisers & New Pension Providers New & Existing Payroll Providers new contract & SLA. Payroll staff & TUPE Hiring New Workers What you can say and not say EMPLOYMENT & BUSINESS LAWYERS16W W W . T H E L E G A L PA R T N E R S . C O M 17. Fixed Price Services Review Your Plan Review / Negotiate New Contracts with Advisers, Pension Providers & Payroll Providers Assess which workers qualify Review Employment Contracts & Staff Handbooks and best way to communicate Training Template Letters Be there to help EMPLOYMENT & BUSINESS LAWYERS17W W W . T H E L E G A L PA R T N E R S . C O M 18. Enforcement & Penalties! Non-statutory action Guidance and instruction. Warning letter confirming a set time frame for compliance with the law Statutory notices Statutory notices to make business comply with the law and / or pay any missed or late contributions + interest. Penalty notices A fixed penalty notice: 400 Escalating penalty notice for failure to comply with a statutory notice: 50 to 10,000 per day depending upon the number of workers. Fail to pay contributions due: up to 5,000 for individuals and up to 50,000 for organisations. Fail to comply with a compliance notice/breach of the law: prohibited recruitment conduct penalty notice: 5,000 for businesses with over 250 staff. Court action: Pension Regulator We aim to fully recover all the penalties that we issue. EMPLOYMENT & BUSINESS LAWYERS18W W W . T H E L E G A L PA R T N E R S . C O M 19. In summary Tell your CEO/CFO and plan now with your HR Team Engage your advisers Join us for our HR Forums in 2014: follow @thelegalpartner CONTACT RICHARD.MULLETT@THELEGALPARTNERS.COMT: 0208 334 8049Take Advice fromThe Legal Partners Copyright: The Legal Partners Limited. All Rights Reserved EMPLOYMENT & BUSINESS LAWYERS19W W W . T H E L E G A L PA R T N E R S . C O M