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AUTO-ENROLMENT

AUTO-ENROLMENT. A presentation by Bill Walker Partner Greyfriars Asset Management LLP. Greyfriars Asset Management LLP is authorised and regulated by The Financial Conduct Authority . People are living longer. People are living longer.

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AUTO-ENROLMENT

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  1. AUTO-ENROLMENT A presentation by Bill Walker Partner Greyfriars Asset Management LLP Greyfriars Asset Management LLP is authorised and regulated by The Financial Conduct Authority

  2. People are living longer • People are living longer Source: Office for National Statistics, Pension Trends Chapter 2, 16 February 2012.

  3. It’s unaffordable Source: Office for National Statistics, Pension Trends Chapter 5, 27 October 2011.

  4. Happy 100th birthday1 In 1917 = 24 Telegrams In 1952 = 255 Telegrams In 2007 = 8,439 Telegrams By 2046 = 214,700 Telegrams 1 Source: The official website of The British Monarchy, January 2012

  5. AUTO-ENROLMENT • All businesses • Auto-enrol all eligible employees (including directors) • Qualifying Workplace Pension Scheme • By your staging date

  6. STAGING DATE • Based on the number of employees as at 1st April 2012 • The Pensions Regulator – inform employers 12 months prior • thepensionsregulator.gov.uk – PAYE Ref.

  7. STAGING DATE • 250 plus employees Oct 2012 – Feb 2014 • 249-50 1/4/14 - 1/4/15 • Less than 50 1/6/15 - 1/4/17 • New employers between 1/4/12 - 30/9/17 • Staging date between 1/5/17 - 1/2/18

  8. ELIGIBLE EMPLOYEES • Eligible jobholder • Entitled worker • Non-eligible jobholder

  9. PENSIONABLE EARNINGS • Qualifying earnings – includes bonus, overtime, sick pay, maternity/paternity, adoption pay • (between £5,668 - £41,450 p.a.) • (increased annually) • 7% of all earnings • 9% of basic pay

  10. PHASING IN Qualifying earningsTotalEmployer minimum Oct 12 – Sept 17 2% 1% Oct 17 – Sept 18 5% 2% Oct 18 onwards 8% 3%

  11. PHASING IN 7% of all earningsTotalEmployer minimum Oct 12 – Sept 17 2% 1% Oct 17 – Sept 18 5% 2% Oct 18 onwards 7% 3%

  12. PHASING IN 9% of basic payTotalEmployer minimum Oct 12 – Sept 17 3% 2% Oct 17 – Sept 18 6% 3% Oct 18 onwards 9% 4%

  13. OPTING OUT • Employees can opt-out at any time • Within one month – refund of contribution • After one month – no refund • DIRECTORS – TAKE CARE!!

  14. WHO WITH? • Insurance companies • Scottish Life, Standard Life, Aviva • Scheme by scheme consideration • Number of employees, average age\salary\contribution • Profitable • At 1% each – probably not

  15. NATIONAL EMPLOYMENT SAVINGS TRUST (NEST) • Low to medium earners • More expensive than insured 1.8% deducted off each contribution plus 0.3% p.a. annual management charge • Limited fund choice • Cautiously invested even for younger people • Currently doesn’t allow transfers in or out • Provider of last resort

  16. SANCTIONS • Stage 1 – Compliance notice - time scale • Stage 2 – Fixed penalty £400 Four weeks minimum to sort it out • Stage 3 – Daily penalties 1-4 £50 5-49 £500 500+ £10,000

  17. SUMMARY • Start now • 2015 - 50,000 employers per month – staging date • Industry won’t cope • Take advice on: • Definition of pensionable pay • % contributions • Which provider www.greyfriars.co.uk

  18. AUTO-ENROLMENT A presentation by Bill Walker Partner Greyfriars Asset Management LLP Greyfriars Asset Management LLP is authorised and regulated by The Financial Conduct Authority

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