This document summarizes a presentation about auto-enrollment pension requirements in the UK. It outlines why employers should care about these requirements, including potential penalties, unbudgeted costs, and reputational risks. It describes who is considered a jobholder that must be enrolled, such as employees aged 22-state pension age earning over £7,475. Employers must auto-enroll these jobholders, provide minimum benefits and contributions, register with the Pensions Regulator, and maintain records for six years. The presentation addresses identifying who counts as jobholders and how to minimize costs, such as using a three month waiting period or salary sacrifice. Key action points include identifying an organization's staging date and registering in time.

1. CBI Pensions Conference 2011
Auto-Enrolment: The Boardroom Perspective
François Barker
Partner and Head of Pensions, Squire Sanders Hammonds

2. Agenda
 Why should I care?
 What do I need to know?
 What do I need to do?
 Key Legal and Practical Issues
 Who are my "jobholders"?
 How do I avoid the risk of employment claims?
 Can I minimise the impact / extra cost?
 Key Action Points

3. Why should I care?
 Penalties:
 2 years in jail
 £10k fine per day
 ET claims
 Unbudgeted costs: Average business (7500 heads) - estimated costs
of £3m p.a.
 Management downtime
 Reputational risks

4. What do I need to know?
 All UK employers
 With "eligible jobholders"
 Contract of employment or other contract to perform services personally
 Working in the UK
 Aged 22 to State Pension Age
 Earning £7,475 or more p.a.
 Not already in a suitable scheme
 Phased in from October 2012 by payroll size - including any scheme
pensioners on company payroll

5. What do I have to do?
 Auto enrol “eligible jobholders” into a QWPS or NEST
 Provide minimum defined benefits, or pay minimum DC contributions
 Register with and provide information to the Pensions Regulator
within two months of “staging date” (www.tpr.gov.uk/staging)
 Keep records of auto-enrolments, opt ins, opt outs and contributions
 legally for at least six years
 practically for much longer
 Provide eligible jobholders with specified information
 Not induce eligible jobholders to opt out
 Every three years, re-enrol any opters out and update registration
with Pensions Regulator

6. What are the key Legal and Practical Issues?
 Who are my "jobholders"?
 How do I avoid the risk of employment claims?
 Can I minimise the impact / extra cost?

7. Who are my “Jobholders”?
 All those with employment contracts
 Other "workers" with contracts to do work or perform services
personally (except contracts with clients / customers of a profession
or business)
 Difficult cases:
 agency staff? Review agreements
 casual / zero hours staff? Review agreements / circumstances
 contractors / consultants? Review agreements / circumstances
 company directors? Review service contracts
 one person companies? Should be exempt

8. How do I avoid the risk of employment claims?
 Avoid "prohibited conduct" at recruitment stage
 Avoid ending active scheme membership without providing a suitable
alternative
 Avoid financial inducements to jobholders to opt out - note risks with:
 flex benefits; and
 high earners
 Avoid breaching new regime - workers have right not to suffer
detriment
 Avoid dismissing for pensions / opt out reasons - automatically unfair
 Update HR / recruitment / pensions and benefits policies

9. Can I minimise the impact / extra cost?
 Use three month waiting period (notice within one week)
 Implement salary sacrifice
 Level down other more generous benefit structures
 Implement pay freezes / other benefit adjustments (query
inducements)
 Use more part timers
 Use single person companies
 Split your payroll
 DB mergers / risk management

10. Key Action Points / Tactics / Strategies
GET SOMEONE TO OWN THE ISSUE
1. Identify your staging date and register with the Pensions Regulator
within nine weeks
2. Do you want to use NEST or a QWPS?
3. DB or DC QWPS? Trust or contract based?
4. Are amendments to your QWPS needed for it to qualify?
5. Ensure your HR payroll systems can:
 identify workers eligible for auto-enrolment (and re-enrolment) – including
temporary and possibly agency staff;
 provide information (but not the opt out form!);
 process opt outs and deal with refunds;
 process opt ins;
 keep records for the appropriate period of time

11. Key Action Points Tactics / Strategies
6. Manage workforce by reviewing agency, director and contractor
terms
7. Update staff handbooks and HR processes accordingly
8. Can any of your extra pension costs be offset (e.g. salary
sacrifice)?
9. Allow for consultation/contractual process if changing existing
arrangements
10. Notify in advance any high earners on enhanced protection who
may be affected.

12. CBI Pensions Conference 2011
Auto-Enrolment: The Boardroom Perspective
François Barker
Partner and Head of Pensions, Squire Sanders Hammonds