Slides heather chandler shoosmiths

Shoosmiths Automatic Enrolment through the lens of a Pensions Adviser

Heather Chandler Partner Shoosmiths LLP

Confidentiality note The contents of this document should be treated as strictly confidential

1

Topics to be covered 1. Salary Sacrifice and auto-enrolment.

2. Contractual obligations •

TUPE transfers

•

opting out of auto enrolment

•

employment contracts

3. Making the right provision decision •

existing scheme vs new scheme

•

choosing a provider

•

moving from one scheme to another

4. Case studies of client experiences

2

Salary Sacrifice and auto-enrolment  Contractual agreement between worker and employer  Worker sacrifices part of salary in return for a non-cash benefit  Reduced National Insurance Contributions  Employer may pass saving on to employee  Cannot take someone below National Minimum Wage

3

Salary Sacrifice and auto-enrolment  Salary sacrifice arrangements can be run alongside auto-enrolment  BUT they must be treated separately  Recommended: Keep communications on salary sacrifice separate to autoenrolment communications  Salary sacrifice arrangement cannot be a barrier to entry or an inducement to opt-out  Assess on pre-sacrifice salary  Pay contributions on post-sacrifice salary

4

Contractual Obligations



TUPE Transfers



Opting out of auto enrolment



Employment contracts

5

Contractual Obligations  TUPE Transfers 

Contributions



Duty to auto-enrol following transfer?  Company A transfers employees to Company B  Scenario 1: Both companies have passed their staging dates  Scenario 2: Neither company has reached its staging date  Scenario 3: Company A has passed its staging date, Company B has not  Scenario 4: Company B has passed its staging date, Company A has not

6

Contractual Obligations  Opting out of auto-enrolment



Statutory opt-out process



Cannot opt-out of auto enrolment altogether



High earners

7

Contractual Obligations  Employment contracts



Contractual alternatives to pension contributions



Possible inducement to opt-out

8

Making the right provision decision



Existing scheme vs new scheme



Choosing a provider



Moving from one scheme to another

9

Making the right provision decision  Existing scheme vs new scheme 

Existing defined benefit or defined contribution scheme  Amendments required?  Amend for all employees or just those to be auto-enrolled?  Consultation required?  Self certification of existing scheme



New defined contribution scheme  Often set up by a third party provider  May be trust based (under a master trust) or contractual (such as a GPP)



NEST (National Employment Savings Trust)  Government scheme (other similar schemes are available)

10

Making the right provision decision  Choosing a provider 

Qualifying scheme?



Costs?



Benefits?



Investment choices?



Flexibility?

11

Making the right provision decision  Moving from one scheme to another 

Communication

12

Case studies of Client Experiences 

Case study 1  Irregular pay reference periods



Case study 2  Dealing with contractual enrolment alongside auto-enrolment



Case study 3  Overseas workers

13