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Pensions Reform is coming Don't put off planning until it's too late What is Pensions Reform? The Government is introducing new rules about work based pension schemes which will start to take effect next year. These rules are compulsory and unless you are self-employed, do not employ anyone else (including agency workers or some contractors), or never will, these rules WILL affect you. There will be stiff legal and financial penalties for those who don't comply. You may have already heard about Pensions Reform or the National Employment Savings Trust (NEST). You may even have received information from other sources. Are you aware that the statutory minimum combined employer/employee contribution will be 8% of each qualifying employee's band earnings, of which you must contribute at least 3%? For more information please read the leaflet 'An introduction to work-based pension changes' (www.thepensionsregulator.gov.uk/docs/intro-to-work-basedpension-changes-2011.pdf) from the Pensions Regulator. This will gives you a summary of the main changes.

As you see, this effectively gives the largest employers until October 2012 to prepare, and the smallest until September 2016. This may seem like a long time away but there is potentially a huge amount of work to do in advance. It's never too early to start planning for the cost and resources needed to comply. Depending on the nature of your business, it may even be more cost-effective to avoid disruption at critical periods by starting to comply before your designated 'staging date'.

What will you need to do? The exact answer to this question depends on a number of factors, but in particular on the answer to the following question: "Do you offer your employees membership of an existing pension scheme (or schemes)?" If "yes", you will need to: 

When will it affect you? The changes will not affect all employers at the same time. Unless you hear otherwise from the Pensions Regulator you will need to have put the changes in place by your designated 'staging date'. This date normally depends on the number of people you employ: Number Of PAYE staff 50,000 + 10,000-49,999 4,000-9,999 1,250-3,999 500-1,249 250-499 90-249 50-89 <50 New employers

'Staging date' Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q3 2014 - Q1 2016 Q1 2016 - Q3 2016

Ensure that your existing scheme meets the criteria as a ‘Qualifying Workplace Pension Scheme' (QWPS). If it doesn’t, you will need to make any required changes - which could even mean putting in place a new scheme or using NEST. Put in place procedures for auto-enrolment of 'eligible jobholders', as defined by the Government's rules.

You will need to have all this in place by your 'staging date'. If "no", you will need to:  

Set up a ‘Qualifying Workplace Pension Scheme' or use NEST. Put in place procedures for auto-enrolment of 'eligible jobholders', as defined by the Government's rules.

You will need to have all this in place by your 'staging date'.


Plan early...

Money Wise services include:

Providing an Initial impact assessment

Seek professional advice and plan any required changes. Start thinking about processes and systems to implement auto-enrolment (e.g. HR and payroll) - put a project plan in place. Make a detailed assessment of any existing pension schemes and other staff benefits linked to scheme membership. Assess the cost including any additional pension contributions made by you and your employees. There will also be cost involved in setting up and communicating new procedures and other potential installation costs. You should factor these into your business plans and ensure your finance and HR functions are involved at an early stage. Ensure that you and/or your employees are maximising the potential employer National Insurance Contributions saving through Salary Exchange. After factoring in statutory consultation periods to changes to existing schemes or employment contracts, communicate any changes to employees in advance (preferably no more than 12 months before your staging date). The Pensions Regulator will remind you 12 and 3 months before your staging date when you must comply with the legislation.

Remember - there will be stiff penalties for non-compliance. If you don't get the planning stage right, these changes could cost you dearly. How Money Wise can help We can provide a tiered service according to your requirements. At a comprehensive level, and together with our strategic partners, this can include helping you to understand how the changes will affect you legally, financially and from a tax perspective.

Pension Reform flyer for employers 02/11

You can think of this as your Pension Reform 'MOT'. It will include detail that is relevant to your organisation and take into account any existing arrangements you have in place. Note that we may need you to supply certain information in order to complete this. If you are an existing corporate benefits client we will provide you with an initial impact assessment as an automatic service. Full advice services This will be a full tailored service based on your needs and can include: 

Identifying and planning any changes to existing arrangements in order to meet QWPS criteria. This can include a full scheme restructure or re-broke. We can help you choose, install and maintain suitable schemes. Identifying and helping to plan changes to procedures to install auto-enrolment, including cost implications and ways in which these can be mitigated. Using the Money Wise flexible benefits scheme, we can help ensure your compliance with regulations on an on-going basis. Assisting with member communication issues, including provision of materials and staff presentations.

If you would like more information or to talk to us about any of the issues, please contact: Tudor Griffiths, Head of Corporate Clients T 020 70652740 E tudor.griffiths@money-wise.co.uk Every care has been taken to ensure that this information is correct and in accordance with our understanding of the relevant regulations.

Money Wise IFA Ltd are authorised and regulated by the Financial Services Authority FSA Firm Ref. No. 185778 Official IFA & Sponsor of Bath Rugby


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