Description The Budget workplace pension offering Scottish Widows is a Master Trust arrangement with a number of parties responsible for the

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2 Description The Budget workplace pension offering is a Master Trust arrangement with a number of parties responsible for the overall running of the scheme. The main benefit of this arrangement is that it is possible to reduce the cost for the end user, whilst still providing a reliable and robust offering. Our offering has been scrutinized by The Pension Regulator; they are completely satisfied with it, and the Master Trust is registered with HMRC Who s involved? The key parties involved in the management, investment and governance of the scheme (The Creative Pension Trust) are as follows: Marketing, client interface, and set up facilitation - Budget Workplace Pensions ltd We are part of a well-established group who provide occupational pension services to hundreds of businesses throughout the UK. All of our advisers are fully trained, including regular sessions with the Pension Regulator with whom we have an excellent working relationship. The management of the scheme - HS Administrative Services Ltd The day to day scheme administration is undertaken by HS Administrative Services Ltd who are an old and well established third party pension scheme administrator. They have an excellent reputation for delivering a quality service. Scottish Widows All contributions are invested with Scottish Widows one of the best known pension companies in Britain. They were chosen for their excellent reputation and brand awareness, meaning your employees can be assured their pension funds are in safe hands. Independent Trustees PAN Governanace LLP The role of the trustees is to oversee all investment, administration and governance matters. They are the experts whose responsibility it is to ensure that funds are being invested well and the administration systems and processes are both safe and compliant. Having strong reliable trustees gives the business owner piece of mind that they have chosen a reliable and safe scheme for his employees. PAN Governance are very well regarded within the Pension community and have regularly won recognition as Independent Trustee of the year at pension industry annual awards. Pre Set Scheme Features Our Auto Enrolment solution has been designed with pre set features that were considered appropriate for small and medium sized businesses. This brings the advantage that business owners do not have to make a string of decisions that they probably are not well equipped (in terms of pension knowledge) to make. 1

3 The features are as follows: Postponement All employees will be automatically postponed for the full three months. N.B should the employee request; we would have to enrol them from the staging date. Default Retirement Age 65 Default life styling period 15 years The default investment strategy is subject to change at the discretion of the Trustee. Definition of Qualifying Earnings Qualifying Earnings are defined as any earnings between 5,824 and 42,384 (for 2015/2016 tax year) and include: Salary or wages Overtime Commissions and bonuses Statutory Sick / Maternity / Paternity / Adoption pay Any other elements of pay as defined in Section 13 of the Pensions Act 2008 Period Member pays Employer pays Upto 05/04/18 1% 1% 6/04/18-5/04/19 2% 2% 6/04/19 onwards 3% 3% All Member Contributions are deducted from gross pay before Income Tax is calculated and the rates above are payable as a percentage of the Member s Qualifying Earnings in the relevant pay reference period. For these purposes, pay reference period shall have the meaning under Regulation 5(2)(c) of the Occupational and Personal Pension Schemes (Automatic Enrolment) Regulations

4 Due Dates for Pension Contributions a) Due dates for Employer contributions The 22nd day of the month following the month in which the Member s contribution is deducted from the Member s pay. The above is subject in all cases to the requirements of Applicable Law. b) Due dates for Member contributions The 22nd day of the month following the month in which the Member s contribution is deducted from the member s pay. The above is subject in all cases to the requirements of Applicable Law. d) Paid Absence other than Family Leave The Employer will pay contributions based on the Pensionable Earnings the member is actually receiving. The Member will pay Compulsory Contributions (and may pay AVCs) based on the Pensionable Earnings the member is actually receiving. e) Unpaid Family Leave or Absence Not treated as Pensionable Service unless required by law. Note : However for employees first enrolled into the scheme, the first 3 months of all contributions must be invested by the 22nd of the month following the end of the 3 month period from the date they were first enrolled. c) Contributions payable during Paid Family Leave Member continues to pay Compulsory Contributions based on Pensionable Earnings actually paid to him or her in respect of the period for which the contributions are made. Employer pays contributions based on Member s Pensionable Earnings as they would have been had the Member not been on Family Leave. 3

5 Fees The fees payable for the provision of the workplace pension fall into two categories. For set up and on-going administration of the scheme - Your Business pays these Scheme charges These are deducted from the scheme funds The full breakdown is as follows: For the initial set up and on going support and administration of your workplace pension To Budget For the set up of the scheme with the Creative Pension Trust For initial and on going advice and support For continuing use of the back end system Budget s fees are as follows: Set Up Fee With Budget, we set up your workplace pension scheme for a small fee of 99. On-Going Monthly Fee N.B. The figure is per business per month Contributions You will have to make contributions for your work force and collect their contributions (via payroll). These contributions will be collected by direct debit by CPT and then invested with Scottish Widows. Unless you instruct us differently the contributions will be placed in the default investment fund. There are three other funds available with Scottish Widows, if you would like details of the default fund and the alternatives please contact us and we will supply full details. To Creative Auto Enrolment (the Scheme Sponsor and Manager of the Creative Pension Trust) N.B. Scheme charges fall within the government price cap 4

6 Scheme Charges The following fees are payable in respect of the Scheme. The active/deferred member fees detailed may be subject to future increases and would be subject to any Auto Enrolment regulations. Category Amount (based from 2014/15 tax year) Who pays it, when and how Active Member Fee (Active Member where contributions in respect of the Member are continuing and are over 5.00 per calendar month) For workers with Qualifying Earnings (Pensionable Earnings) below the equivalent of 12,228 (2014/2015 tax year) per year. Based on the total Qualifying Earnings (Pensionable Earnings) on which pension contributions are remitted each calendar month: 0.60 per calendar month prior to 1 October per calendar month from 1 October 2017 and prior to 1 October per calendar month from 1 October 2018 For all other workers, 2.00 per calendar month. Deducted from Member s Personal Retirement Account monthly. 5

7 Category Amount (based from 2014/15 tax year) Who pays it, when and how Deferred Member Fee (Deferred Member where contributions in respect of The Member have ceased) For workers with Qualifying Earnings (Pensionable Earnings) below the equivalent of 12,228 (2014/2015 tax year) per year at date of leaving. Based on the total Qualifying Earnings (Pensionable Earnings) on which pension contributions are remitted for the last complete calendar month per calendar month for leavers prior to 1 October per calendar month for leavers from 1 October For all other workers, 1.20 per calendar month. Deducted from Member s Personal Retirement Account monthly. Deferred member fees will only be deducted where the Member s Personal Retirement Account is greater than Investment/ Administration Management Charge (All Members) 0.40% per year of each Member s Plan Account. Deducted partly: 1) From Member s Personal Retirement Account monthly and; 2) From the Plan assets at an aggregate level by daily deductions before the funds are valued for unit pricing, and notionally allocated at the appropriate rate to each Member s Personal Retirement Account. 6

8 Budget Workplace Pensions We re dedicated to supporting small business owners in setting up a simple, effective, fully compliant workplace pension as easily as possible. To find out more about how Budget can help you, your business and your employees, contact us today on or info@budgetworkplacepensions.co.uk or visit 7