Blake Lapthorn and Hays Recruitment held a joint seminar on the challenges and requirements of auto enrolment on Tuesday 26 March 2013 at Blake Lapthorn's Oxford office.
Blake Lapthorn’s green breakfast seminar on Social Finance - 27 March 13
Blake Lapthorn and Hays Recruitment - Auto enrolment seminar - 26 March 2013
1. Blake Lapthorn and Hays –
auto enrolment – helping you plan,
prepare and cope with the challenges
The what, why, how and when
The practicalities and the opportunities
26 March 2013
Seacourt Tower
2. Auto enrolment – helping you plan, prepare
and cope with the challenges
Welcome
Housekeeping
The book of the film
What we will cover today and what we will not cover
Participate
Challenge
Enjoy
Adrian Lamb
Blake Lapthorn
adrian.lamb@bllaw.co.uk
4. Auto enrolment – helping you plan, prepare
and cope with the challenges
What we will cover today What we will cover on 25
April
The basics
The employment What it will cost
considerations The challenges for systems
Communications – the The different vehicles
what, when and how The pros and cons and trust
The HR issues and and contract based
challenges arrangements
The strategic opportunity
5. Auto enrolment – helping you plan, prepare
and cope with the challenges
8.30 am to 10.30 am
Introduction
The basic requirements – Shaun Thompson, Blake
Lapthorn
The employment considerations – Debbie Sadler, Blake
Lapthorn
Communications – what when and how – Samantha
Waterhouse – Shilling Communications
The HR challenges – David Miles, Blake Lapthorn
Open forum/Q&A/Summing up
6. Who does it apply to?
Employers and workers
An employer is defined as anyone who has a contract with
a ‘worker’
An employer must identify whether they have a ‘worker’ –
in some cases this may not be clear
As a minimum, an employer with one or more worker(s)
will need to register with The Pensions Regulator
It is important to understand the different categories of
worker –and the duties they will have in respect of each
category
7. What does an employer have to do?
Automatic enrolment
Opting in, joining and contractual enrolment
Managing opt outs
Providing information
Make/maintain employer contributions
Keep records about their workers and the pension scheme
Keep track of ages and earnings
8. When and how?
Do you know your staging date?
Communicate at the right time to the right person
Enrol the right workers at the right time
Pay the right contributions at all times
9. Auto enrolment – helping you
to understand the requirements and
to deal with the challenges
Shaun Thompson
Pensions team, Blake Lapthorn
shaun.thompson@bllaw.co.uk
10. Auto enrolment in a nutshell
Applies to all UK companies!
Workforce is split into eligible, non eligible and entitled
workers
Different obligations in relation to each category of worker
Some obligations in force now, others will come into force
in coming months and years
Re-enrolment obligations
11. Auto enrolment route plan
Know what your obligations are and when they apply to
you
Know how you’re going to comply with them
Planning, preparation and budgeting is vital – give yourself
enough time!
12. Staging date
What is it?
When is it?
Do you know when your company’s staging date is?
Remember pre staging date obligations!
Bring forward your staging date?
13. Identifying your workforce
What is a worker and are they ordinarily working in the
UK?
Know which of your employees are eligible jobholders,
non eligible jobholders and entitled workers.
Keep this under continual review – employees can switch
between categories!
Can your processes and systems cope with this?
14. What is a worker?
Three Tier Test:-
Individual works under a contract (express or implied);
Individual is under an obligation to provide a personal
service to the other party; and
The other party to the contract is not a customer of a
business undertaking carried on by individual
Not always as simple as it may seem!
15. Jobholders and entitled workers
Eligible jobholders
– Workers
– Aged between 22 and SPA
– Earning over income tax personal allowance threshold
(currently £8,105, due to rise to £9,440 from 6 April 2013)
Ineligible jobholders
– Workers
– Aged between 16 and 22 or SPA and 74 who earn over
income tax personal allowance threshold; or
– Any age who earn between NI Lower Earnings Limit
(£5,564) and income tax personal allowance threshold
Entitled worker
– Any age with earnings below NI Lower Earnings Limit
Know your obligations in relation to each category and watch
out re opt outs and opt ins!
16. Identifying different types of worker (April 2013)
Age
75
OPT IN
Employer contribution
SPA
OPT IN OPT IN AUTO-ENROL
No employer Employer Eligible
contribution contribution jobholder
(“Entitled
workers”)
Qualifying Earnings (QE)
22
OPT IN
Employer contribution
16 Earnings
£5,568 £9,440 £41,450
Qualifying Earnings Upper
Earnings Trigger Limit
Threshold
17. Pay reference periods
What is a pay reference period?
Vital to work out what your pay reference period is and
what earnings are paid in it
18. Earnings “spikes” – low earners
The earnings trigger applies pro-rata in every pay period – so £786.66
p.m., £181.54 p.w.
John normally earns £460 per month, so is not auto-enrolled as he
earns below the Earnings Trigger of £9440. However in December
2013 (for one month only) John earns £800 – over the £786.66 trigger
John must be auto-enrolled in December even though his total
expected annual earnings are still less than the Trigger. Total
contributions are 2% of £336 (£800 less £464 QET) – ie £6.72 for the
pay period
In January to July 2014 he earns £460 each month, below the QET, so
no contributions are deducted
In August 2014 he gets a 5% pay rise, and earns £483, so contributions
need to be paid in respect of £19.00 of monthly earnings
At 2% that is a contribution of £0.38 for the pay period
19. Postponement
Employer can delay auto enrolment obligations for up to
three months
Potentially very useful if you have short term employees
Prescribed notice requirements
Opt ins during postponement period
20. Notices and record keeping requirements
Prescribed requirements which employers must meet
Remember deadlines and time limits!
Have appropriate administration processes in place!
21. Penalties for non-compliance
Pensions Regulator can intervene and require certain
steps to be taken and/or impose financial levies for non-
compliance
Fines can be of up to £10,000 a day
Criminal offences
Should help companies focus on their duties and
obligations!
23. Auto enrolment – helping you
to understand the requirements and
to deal with the challenges
Shaun Thompson
Pensions team, Blake Lapthorn
shaun.thompson@bllaw.co.uk
25. Contract of Employment
Legal requirements?
Are contractual terms incompatible?
Contractual enrolment?
Different approaches for different groups : discriminatory?
49. - Put pension
saving in context
- Provide regular
prompts
- Help set targets
and goals
- Targeted and
personalised
- Counteract known
misconceptions
50.
51. What we’ve learnt…
1. It’s more about payroll, technology & processes
– Data quality is poor
– Invest time to save time
2. Focus on compliance
– Eligibility tools
– Governance
– Initial communication
– On-going communication
52. What we’ve learnt…
3. Pre- enrolment promotion does help
–Government “I’m in campaign” hasn’t registered
4. Long term ‘engagement’ is not in focus but it
should be.
–Think about perception
–Don’t forget about HR
5. Keep it simple!
57. Is your plan coherent?
Business
Strategy
Employer Employees
Brand Needs
Legal
obligations
Reward
Culture
Strategy
Talent
Managem
ent
58. Are your HR and employment processes fit
for purpose?
Recruitment and Induction process
Opt-in/out processes (including refund through payroll):
Other HR processes:
Communications about Pensions
Communications about other Benefits
59. Are your HR ,payroll and pension admin
systems fit for purpose?
Robust enough and ready
Effective links to your communications processes
Fully specified to deal with AE in all circumstances
60. HR summary
Not just a HR or pension change or initiative
Collaborative multi-departmental approach
Strategic perspective on the role of pensions
Opportunity for a complete review of benefits
Get the processes right
Focus on education and communications
Staging and triennial re-enrolment spikes
Measure the cost and impact of AE….an opportunity to
demonstrate value of HR
61. Auto enrolment
HR Issues and Challenges
David Miles
HR Adviser
Blake Lapthorn
david.miles@bllaw.co.uk
62. Auto enrolment – helping you plan, prepare
and cope with the challenges – some recent
headlines
• Asda reports 8% auto-enrolment opt-out rate
• Royal Mail encouraged by 16% opt-out rate
• Mastertrust chiefs debate capacity crunch and
opt-ins
• OECD calls on government to raise auto-
enrolment contributions to 15%
• Companies in 'limbo' over contracted-out
workers
63. Auto enrolment – helping you plan, prepare
and cope with the challenges
Some obvious (and not so obvious) questions and
comments
What does it have to do with a pension?
The bare minimum will not be adequate
Is auto enrolment just a precursor to more tax or NI?
Is it right for everybody?
If it has little to do with pensions what does it have to do
with?
Lots of choices, lots of work, but limited resources and
possibly limited time
Big picture should not be ignored
What would success look like?
64. Auto enrolment – helping you plan, prepare
and cope with the challenges
Are you an employer/do you have workers?
Do you know your workers – eligible, non-eligible and
entitled?
Do you know your staging date
– 1 September 2013 for 1250 to 1999 employees
– 1 April 2015 for 50-53 employees
– So next two years will catch a very large number of
workers and employers
Do you know your pay cycle(s)?
How will you cope with variable earnings for low and high
earners?
Will there be capacity when you are ready to go?
65. Auto enrolment – helping you plan, prepare
and cope with the challenges
What about your contracts, terms and conditions, etc?
Are you ready for all the communications you will need –
there are lots!
Who will do all of this work? How will you cope?
Do you have a plan?
Are you prepared?
Have you started?
66. Auto enrolment – helping you plan, prepare
and cope with the challenges
Menu/to do list (if you don’t have one already)
Nominate a point of contact
Assemble project team
Know your staging date
Develop a plan
Assess your workforce
Engage with your suppliers and advisers
Automate what you can
Review your current arrangements
Communicate to ALL your workers
Automatically enrol
Register
Keep records
Contribute
67. Auto enrolment – helping you plan, prepare
and cope with the challenges
The next episode - 16 April 2013, New Kings Court, 25
April, Oxford
– What it will cost – the hard and the soft costs
– The challenges for systems
– The different vehicles
– The pros and cons and trust and contract based
arrangements
– The strategic opportunity
Feedback
Continue discussions over coffee
Thank you for coming