Pensions presentation
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Endsleigh Financial Services Ltd. offers an auto-enrolment solution for locality members, providing specialist advice on pensions and commercial insurance. The document outlines the requirements under the Pensions Act 2008, the categorization of workers for auto-enrolment, and details about contributions and the Locality Pensions and Savings Scheme (LPSS). Key benefits of the LPSS include cost efficiency, tax savings, and administrative simplicity for member organizations fulfilling their auto-enrolment obligations.
Pensions presentation
- 1. Auto-enrolment solution for Locality members Adam Smallman Endsleigh Financial Services Ltd.
- 2. Introducing Endsleigh Financial Services Ltd. Endsleigh has been working with Third Sector organisations for many years and it is this expertise which led to Locality choosing Endsleigh to provide specialist advice and support to its members. - Pensions and Savings Scheme - Commercial Insurance
- 3. Do you use any of Endsleigh’s services as a Locality member? Poll Yes – Pensions and Savings Scheme Yes – Commercial Insurance Yes – both None
- 4. • Compulsory for all employers to make mandatory pension provision for their employees, to be phased in from 2012 • Up to 11million people in the UK will be automatically enrolled in a pension scheme • Employers can use NEST or an alternative qualifying pension scheme to enrol staff • Brought about by… • Greater longevity - By 2050 the number of retired people in the UK will rise by more than a 33%. • Huge strain being placed on the UK Pension System The Pensions Act 2008
- 5. Auto-enrolment compliance Legislation phased in from Autumn 2012 Eligible employees are automatically opted-in Employees have the right to opt-out Records of contribution levels, automatic enrolment and opt-in and opt-outs must be kept for a period of at least 6 years. Employers must automatically re-enrol employees every 3yrs No entry barriers (e.g. eligible from day 1, not after 3 months) Enrolment process must remove all decisions from the employee (e.g. investment choice, contribution rates) Employers must not give any advice to employees
- 6. Auto-enrolment - Contributions Total contribution required Minimum employer contribution Worker contribution Tax relief October 2012 to September 2017 2% 1% 0.8% 0.2% October 2017 to September 2018 5% 2% 2.4% 0.6% October 2018 onwards 8% 3% 4% 1% The government has set a minimum percentage that has to be contributed in total, including your contribution, your employer's contribution and tax relief. The table below shows how this minimum figure will increase gradually between October 2012 and October 2018.
- 7. Member Categories Category of worker Description of worker Eligible jobholders A worker is an eligible jobholder if he or she: •is aged between 22 and below state pension age; •has qualifying earnings1 of more than the earnings trigger for automatic enrolment2; and •is contracted to work in the UK. Non-eligible jobholders A worker is a non-eligible jobholder if he or she: •is aged 16 to 21 and has qualifying earnings1 of more than the earnings trigger for automatic enrolment2; •is aged state pension age to 74 and has qualifying earnings1 of more than the earnings trigger for automatic enrolment2; or •is aged 16 to 74 and has qualifying earnings1 at or below the earnings trigger for automatic enrolment2, and is contracted to work in the UK. Entitled worker A worker is an entitled worker if he or she: •is aged 16 to 74; •does not have qualifying earnings1; and •is contracted to work in the UK.
- 8. Categories of workers • Employers are required to auto-enrol eligible jobholders into a qualifying workplace pension scheme • Employers are required to provide non-eligible jobholders with certain information about opting-in to a qualifying workplace pension scheme. If a non-eligible jobholder opts in, the employer has the same duties in relation to the jobholder as it has in relation to eligible jobholders. • Employers are required to provide entitled workers with information about joining a pension scheme that satisfies the requirements of s.9(7) of the Pensions Act 2008, and arrange membership of the scheme for them if they choose to join. 1To have qualifying earnings a person must earn more than the lower earnings level of £5,772. 2The earnings trigger for automatic enrolment is £10,000, which is the income tax threshold for 2014/15.
- 9. Questions Adam Smallman Endsleigh Financial Services Ltd. 01242 866240 adam.smallman@endsleigh.co.uk Adam Smallman Endsleigh Financial Services Ltd. 01242 866240 adam.smallman@endsleigh.co.uk
- 10. Do you know when you staging date is for auto-enrolment? Poll Yes – 2014 Yes – Jan-Jun 2015 Yes – Jul-Dec 2015 Yes – 2016 or later No
- 11. Do you have a pension scheme in place? Poll If yes, is it compliant for auto- enrolment? Yes No Yes No I don’t know
- 12. The Locality Pensions and Savings Scheme
- 13. Locality Pensions and Savings Scheme: Key features • Flexible retirement age (55-75) • Flexibility of contributions • Accepts transfers • Low cost – economies of scale • Annual Management Charge 0.45% • Nil ongoing IFA commission
- 14. Locality Pensions and Savings Scheme: Default investment Default investment option: Lifestyle Strategy • Ethical fund available • Sharia fund available • Balanced approach to investment choices • Lifestyle fund
- 15. Before Salary sacrifice After Salary Sacrifice Gross Salary £30,000 £28,200 (£30,000 - £1,800) Employers’ NI liability £3,106.66 £2858.26 Employers Pension Contribution (Via SS) £0 £1,800 Total Cost to Employer £33,106.66 £32,858.28 Annual Employer NI Saving {£248.40} •Cost efficiency: By utilising the collective buying power of the entire Locality membership we have secured a market leading rate on LPSS of 0.4% Annual Management Charge (many schemes operate at 1-1.5%). •Tax Efficiency: By operating the scheme on a salary sacrifice basis, member organisations can make considerable savings on their overall employers National Insurance liability. •Technology: Again using economies of scale of the whole membership, LPSS gives members access to market leading software available through the Zurich Corporate Saving Platform. •Auto-Enrolment Compliancy LPSS will provide a simple and straight forward solution to employers’ auto-enrolment obligations. •Administrative Simplicity & Ongoing Governance LPSS members will receive a readymade solution to auto-enrolling staff. Locality Pensions and Savings Scheme: Key benefits of the scheme
- 16. • Set-up of member organisation as a ‘Pay Centre Administrator’. • Support and training for payroll / administrative staff on how Zurich’s Corporate Savings Platform system works • Collection and processing employee Joining Forms • Collection and processing of set up documents • Provision of communications material (e.g. Key Features Document) for distribution to employees. • Collection of all employee Joining forms from Participant Members Locality Pensions and Savings Scheme: Joining Fees Number of Employees Cost 1-10 £500 11-25 £750 25+ £1,000
- 17. - Analysis of existing pension schemes - Pension transfers - Presentation to the Board - Communication of scheme with staff Locality Pensions and Savings Scheme: Other Services Number of Employees Cost 1 - 10 £250 per year 11 – 25 £375 per year 25+ £500 per year The costs of these services will be agreed due to the type and complexity of work required. - Annual Support - Annual review of scheme suitability - Annual review of default investment fund - Provision of dedicated direct telephone help line for administrative queries.
- 18. Summary •Auto-enrolment •Employer contribution levels •The LPSS and it’s benefits •The benefits of financial advice to your organisation
- 19. Would you consider the Locality Pensions and Savings Scheme for your organisation? Poll Yes
- 20. Questions Adam Smallman Endsleigh Financial Services Ltd. 01242 866240 adam.smallman@endsleigh.co.uk Adam Smallman Endsleigh Financial Services Ltd. 01242 866240 adam.smallman@endsleigh.co.uk
- 21. More webinars coming up http://locality.org.uk/events