You don t have to go it alone

Transcription

1 Corporate & Employer Solutions You don t have to go it alone Expert guidance for your auto enrolment journey

2 Pension auto enrolment is here This year marks the staging date for many businesses to enrol their eligible employees into a pension scheme to comply with new regulations. And whilst the concept of auto enrolment may seem simple, the implementation is not. Like all new legislation, the devil is in the detail. The associated time, money, planning, complexity and communication challenges associated with being compliant cannot be underestimated. But you don t have to go it alone. Barclays is here to help you on every step of the journey. We ve already helped many corporate companies successfully complete their auto enrolment journey. From this experience we know the steps your business needs to take, and the pitfalls to avoid, to make your journey a success. 1 of 7

3 The nine key steps to smooth auto enrolment Know your staging date Assess your workforce Communication Data migration testing Auto enrol eligible job holders Register with The Pensions Regulator (TPR) and keep records Continual assessment/re-enrolment Review existing pension schemes and select your supplier Default investment selection Contribute to your workers pensions 2 of 7

4 The nine key steps to smooth auto enrolment 1. Know your staging date Every UK employer has a staging date the date by which they must comply with auto enrolment regulations. This is based on your employee headcount as at 1 April You can confirm your staging date on The Pensions Regulator website by entering your PAYE reference code. 2. Assess your workforce It s important to know who s eligible for auto enrolment and who isn t. An employee s eligibility is based on their age and their income. Assessment tools are usually accessible through your payroll provider, pension scheme or even managed in-house. Employees must be automatically enrolled and make contributions to your workplace pensions scheme if they: are aged between 22 and the State Pension Age earn more than 10,000 a year work in the UK. 3. Review existing pension schemes and select your supplier If you have an existing pension scheme in place, you ll need to check if it qualifies as a workplace pension scheme under the new auto enrolment regulations. The right design, contribution and charging structures are essential to delivering a quality solution. You ll also need to consider if your scheme will comply with the annual charge cap of 0.75%, which will apply to all pension schemes from April 2015 onwards. 3 of 7

5 The nine key steps to smooth auto enrolment 4. Default investment selection This may be the first time many of your employees have been involved in a pension scheme and they may have very little experience with investing. That s why all pension schemes for auto enrolment need to have a default investment solution. It s important to provide your employees with a suitable and tailored default option. A vital step in the design of your qualifying scheme is having an audit trail demonstrating how and why the investment solution was chosen. 5. Data migration testing This is a long but essential step in the journey. Data migration testing ensures you take the time to understand the requirements of your payroll system, your pension provider and your in-house solutions. It s critical that the providers for each part of your auto enrolment solution integrate and work well together. 6. Communication Effective and open communication through the lead-up and implementation of your auto enrolment scheme is a must. Keeping your employees informed will save you time responding to queries and questions. Auto enrolment presents a great opportunity for you to think about how and what you want to communicate to your employees, not just in relation to statutory pension requirements, but about employee benefits in general. Staff engagement has become increasingly important and a well thought-out employee benefit communication strategy can pay dividends. 4 of 7

6 The nine key steps to smooth auto enrolment 7. Auto enrol eligible job holders Once they ve been informed, the next step is to enrol all your eligible employees into the pension scheme and notify them when it s going to happen. The Pensions Regulator will look at what qualifying workplace pension scheme you re placing them in and insist you keep detailed records. 8. Register with The Pensions Regulator (TPR) and keep records The TPR requires every employer in the UK to register their auto enrolment solution. You can do this at thepensionsregulator.gov.uk and run through their checklist to ensure your solution meets their standards. Remember, if you re using more than one pension scheme, you ll need to register each solution. You re also required to keep records for all the payments you ve put into your pension scheme for up to six years, as well as for all employees that have joined or opted out of your scheme. It s important to confirm who ll hold these records. It s likely this will be your payroll provider, pension provider or held within your company HR system. 9. Contribute to your workers pensions The level of contributions required will be phased in over time. The initial minimum will be 1% of qualifying earnings from both employer and employee, rising to 3% employer and 5% employee contribution (including tax relief) from October But this isn t necessarily the end of the process. Employees may choose to opt out of your qualifying workplace arrangement. If they decide to do this, you ll need to have processes in place that deal with a refund of contributions in a timely fashion. 5 of 7

7 Continual assessment Once you ve completed these nine steps you ll need to continue monitoring your auto enrolment scheme and send monthly data to your pensions provider from payroll. Every three years, you ll need to re-enrol employees who have opted out back into your pension scheme. The three common pitfalls to avoid 1. It s more complex than you think Auto enrolment is more complicated and time-consuming than most businesses imagine. There are many routes to compliance but not all end in success. Having a plan for such a complex piece of legislation is essential. There are numerous areas of your business that should be involved including finance, HR, payroll and IT. It s important that everyone on your project team agrees on the key objectives from the outset (e.g. do you need to upgrade your payroll?). In our experience it takes roughly 250 man-hours to implement an auto enrolment solution 2. It s more costly than you think It s important to be aware of the additional costs associated with auto enrolment that you may not have considered. This may include system upgrades, communications and the cost of people s time to successfully implement a new scheme. While many employers account for the impact of contributions, they sometimes don t consider these other hidden costs. 3. What s already in place may not work We ve worked with a lot of businesses who think it s job done if they have an existing pension scheme in place. Many have up to 30% of their employees in a pension scheme and assume they can simply place the rest into the same arrangement. However, a number of pension providers won t accept these additional members into their scheme for various reasons, such as lower expected contribution rates per member. Don t assume that your existing provider will happily take those extra employees. You may need to consider going elsewhere. 6 of 7

8 Start your journey Our experience to date has shown that auto enrolment is 20% pension and 80% process. Barclays knows both, having helped many companies succeed on their auto enrolment journey. Our team s knowledge and expertise are available to every company, big and small. If you are looking to set up an auto enrolment solution for your business with minimum effort, we have an efficient solution that can be established online in a few simple steps. Barclays has made arrangements with a leading provider of pensions in the UK to bring you a unique online solution. To start your journey today visit barclays.com/autoenrolment Alternatively you can contact us directly by calling * or autoenrolment@barclays.com *For BT business customers, calls will cost no more than 4.5p per minute, min call charge 6p (current at May 2014). The price on non-bt phone lines may be different. Tax rules can change and the benefits and drawbacks of particular tax treatment will vary with individual circumstances. Barclays is not a legal or tax adviser and is not providing you with legal or tax advice. Nothing in this document should be construed as legal or tax advice. If clients have any queries as to the legal or tax implications they should seek independent professional advice. Barclays offers wealth and investment management products and services to its clients through Barclays Bank PLC and its subsidiary companies. Barclays Bank PLC is registered in England and authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered No Financial Services Register No Registered Office: 1 Churchill Place, London E14 5HP. 7 of 7