25107 automatic enrolment 8pp final v4

Automatic enrolment with Genesis

25107 Automatic Enrolment 8pp.indd 1

19/11/2014 12:19

Automatic enrolment with Genesis Automatic enrolment in the Genesis pension scheme starts on 1 January 2015.

All Genesis employees who are currently not in the Genesis pension and who meet the criteria will be enrolled in the Genesis pension scheme, SHPS DC, and will have a pension contribution deducted from each pay.

Is everyone being enrolled into a workplace pension?

By law every UK employee has to be enrolled into a workplace pension if they meet the auto enrolment statutory criteria.

Auto-enrolment criteria You will be automatically enrolled if: • You earn over £833 in a month • You are aged 22 or over • You are under State Pension age.

Why is this happening?

The Government wants more people to save properly for their retirement.

The Government’s policy is to make sure that people are able to make suitable provision for themselves and not rely on the Basic State Pension and Pension Credit solely for their retirement. They have changed the rules to encourage people to save for their pension.

The State Pension is a foundation for your retirement. Today the maximum basic State Pension you can get is £113.10 per week for a single person. If you want to have more than that when you retire, you need to save during your working life.

Otherwise, you may reach retirement facing a significant fall in your standard of living.

The government is getting employers to enrol their workers automatically into a pension at work so it is easier for people to start saving.

You can opt out if you want to, but if you stay in you will have your own workplace pension which is boosted by your employer.

25107 Automatic Enrolment 8pp.indd 2

19/11/2014 12:19

Who will pay into the pension?

You will pay into it. Genesis will pay into it too. Plus most people will get a contribution from the government in the form of tax relief. This means some of your money that would have gone to the government as tax, goes into your pension instead.

Your employer must contribute to your pension if you earn more than a certain amount (£5,772 a year, £481 a month, £111 a week in 2014-15). If you join the Genesis workplace pension scheme, regardless of your earnings Genesis will also make a contribution.

How much do I have to pay?

We think that the change in Government policy to introduce auto-enrolment is a good thing. Genesis wants staff to have an adequate pension and for this reason is offering more than the government’s minimum employer requirement of 1% (namely, 1% employer contribution, 1% employee contribution and total minimum contribution of 2%).

Genesis has set a 2% standard minimum contribution and will match whatever you contribute up to 7.5%. You can change your contribution rate at any time after enrolment, although you cannot go below the statutory minimum of 1%.

If you pay, Genesis pays.

25107 Automatic Enrolment 8pp.indd 3

19/11/2014 12:19

Are the payment amounts fixed?

No. The law states that the minimum contributions must increase over the next three years. The Government is doing this to encourage people to build up enough money in their own pension pots for retirement.

The table below shows what the law says we should do and what Genesis proposes to do as your employer. We want to support our staff to save for their retirement and therefore intend to offer better arrangements than the Government requires.

Statutory requirements

Genesis “minimum standard contributions

Date

Employee contribution

Employer minimum contribution

Total minimum contribution

Employee contribution

Employer contribution

Total

1 January 2015 to 30 September 2017

1%

1%

2%

2%

2%

4%

1 October 2017 to 30 September 2018

3%

2%

5%

3%

3%

6%

From 1 October 2018

5%

3%

8%

TBC

TBC

TBC

From 1 January 2015, all staff who are auto-enrolled will automatically pay a minimum pension contribution of 2%. Genesis will match this payment.

Genesis will continue to give employees flexibility to decrease their contributions to the statutory minimum or increase their pension contributions over and above the amounts quoted above if you wish.

Genesis will continue to match the percentage contribution up to a maximum of 7.5%.

25107 Automatic Enrolment 8pp.indd 4

19/11/2014 12:19

What are the benefits?

For many people, paying into a workplace pension scheme is a good idea - even if they have other financial commitments, such as a mortgage or a loan. This is because you’re not the only one putting money in.

There is a legal requirement for Genesis to contribute to your pension as well, if you earn over a certain amount. Genesis goes further than this and regardless of your earnings, “if you pay, Genesis pays”.

Most people will also get a contribution from the government in the form of tax relief. This means some of your money that would have gone to the government as tax, goes into your pension instead.

Over time, this money adds up and can grow.

The table below shows the net impact if you join the Genesis pension scheme based on the selected salaries below:

Total Annual Pension Contribution based on 2%

Annual Employee’s Tax relief (at 20% basic rate)

Annual net cost to employee (employee contribution less the tax relief)

Monthly net cost to employee

£240.00

£480.00

£48.00

£192.00

£16.00

£300.00

£300.00

£600.00

£60.00

£240.00

£20.00

£20,000.00

£400.00

£400.00

£800.00

£80.00

£320.00

£26.67

£30,000.00

£600.00

£600.00

£1,200.00

£120.00

£480.00

£40.00

Annual Pensionable Salary

Annual Employee Pension Contribution based on 2%

Annual Employer Pension Contribution based on 2%

£12,000.00

£240.00

£15,000.00

2% is the standard percentage used for those staff auto enrolled into the pension scheme.

If you start saving into a workplace pension but then a few months or years later you want to stop paying, you can do so.

You can start paying into your employer’s scheme again at a later date, if you decide you want to.

25107 Automatic Enrolment 8pp.indd 5

19/11/2014 12:19

Can I salary sacrifice my pension contributions?

Employees will be given the opportunity to sacrifice/exchange their salary for pension contributions but this will not be automatic.

Salary sacrifice is an arrangement that enables an employee to boost their existing pension contributions. An employee agrees to reduce their salary and in return Genesis pays the equivalent amount into the employee’s pension scheme in addition to the normal employer pension contribution.

If an employee elects to salary sacrifice they can make a saving in national insurance and income tax contributions.

Salary sacrifice may not be suitable for everyone. Salary sacrifice can affect entitlement to state retirement benefits, working tax credit or child tax credit, statutory maternity pay and importantly it must not take pay below National Minimum Wage rates. Salary sacrifice is therefore not suitable for all employees but for some it’s a great way to make savings and maximise pension contributions.

Your pension administrator can help you assess whether a pension sacrifice is right for you.

Can I opt out?

You will be able to opt out of the scheme once your auto-enrolment is complete, but if you stay in you will have your own workplace pension which you get when you retire.

We would encourage you to think about what you might need to live comfortably when you retire and what you can afford to invest now. Genesis has decided to offer more than the government requires and will match your contribution up to 7.5% so that you effectively double your pension contribution.

Due to the new laws, you cannot opt out until you have received confirmation that you have been auto-enrolled. More information about opting out will be provided to you in your auto-enrolment confirmation letter, which you will receive towards the end of January 2015.

Please bear in mind if you opt out Genesis will also stop contributing to your pension.

25107 Automatic Enrolment 8pp.indd 6

19/11/2014 12:19

Please note: The law says that on the third anniversary of implementing autoenrolment Genesis must re-enrol employees who have previously opted out.

For Genesis this will be January 2018, however you will be able to opt out again at this point.

What is Genesis’ workplace pension fund?

The Genesis pension scheme is called Social Housing Pension Scheme Defined Contribution (SHPS DC).

In a Defined Contribution scheme like SHPS DC, your pension pot is put into various types of investment, such as shares (shares are a stake in a company).

The amount you get at retirement is based on how much is paid in and how well the investments have performed.

The normal pension age for the SHPS DC is 65. When you join the Scheme, you will select a retirement date (SRD) after age 55 years.

Normally, when you retire, you take some of your pension pot as a tax-free cash lump sum. You use the rest to buy yourself an income, on which you might pay tax. These are also known as ‘money purchase’ schemes.

If you have any questions regarding the SHPS Defined Contribution pension scheme please contact the Pension Trust By telephone: 0845 072 6780 By email: smarterpensions@gltgroup.com By post: Smarter Pensions Team, JLT Benefit Solutions, First Floor, Columbia Centre, Station Road, Bracknell RG12 1LP. If you require further information regarding auto-enrolment at Genesis, please contact John FitzGerald, Pensions Administrator at 0208 548 2182 or.

John.FitzGerald@genesisha.org.uk Please refer to Genie for the Workplace Pension Frequently Asked Questions document.

25107 Automatic Enrolment 8pp.indd 7

19/11/2014 12:19

Useful Contacts Information

Contact

Genesis pension scheme

For information regarding the Genesis pension scheme (SHPS DC - Social housing pension scheme defined contribution) www.shpsdc.org.uk For answers to your enquiries, including questions for saving for the future: The Pensions Trust, Smarter Pensions Team, JLT Benefit Solutions, First Floor, Columbia Centre, Station Road, Bracknell RG12 1LP Tel: 0845 072 6780 Email: smarterpensions@jltgroup.com For information regarding auto-enrolment and salary sacrifice at Genesis: Tel: 0208 5482182 Email: John.FitzGerald@genesisha.org.uk

Pension provider

Genesis Pensions Administrator

Government changes to To find out more about auto enrolment and work place workplace pensions please refer to: www.gov.uk/workplacepensions pensions Pension concerns If you’re concerned you won’t have enough pension when you retire, you could think about contributing more into your pension, working longer, and/or saving in other ways. You can find out more about your options at: www.gov.uk/plan-retirement-income Pension Tracing If you have lost track of a previous pension, the government’s Service Pension Tracing Service could help provide you with the contact details for that pension. www.gov.uk/find-lost-pension Pensions Advisory If you need help with your pension options, the Pensions Service Advisory Service might be a good starting point www.pensionsadvisoryservice.org.uk Money advice If you’re struggling with debts and would like advice on how to manage your money, you might find the Money Advice Service a good starting point. www.moneyadviceservice.org.uk Pensions For information about the Pensions Regulator (regulates regulator workplace pensions) www.thepensionsregulator.gov.uk

25107 Automatic Enrolment 8pp.indd 8

19/11/2014 12:19