Auto Enrolment V1.4

Teachers’ Pensions Scheme Contractual Enrolment Any new employees must be enrolled in the Teachers’ Pension Scheme in accordance with scheme provisions, regardless of their age and earnings when they commence employment - unless they have previously opted out - This is known as contractual enrolment The Opt Out ceases to apply if they: Opt In or The employer reaches the date on which they must Auto Enrol them

Simply, Auto Enrolment … What’s Auto Enrolment? Involves employers enrolling eligible workers into a pension scheme on set dates It allows people to have another income, on top of the State Pension, when they come to retire Detailed guidance about the employers duties to auto enrol can be found on the Pensions Regulator’s website – Important Note: The majority of teachers are already in the Teachers’ Pension Scheme, so this will not affect them but you must inform them about Auto Enrolment and their option to opt out The Teachers’ Pension Scheme will remain the scheme of choice for employers of teachers.

What are staging dates? Each employer has a date on which to enrol their workers this is known as their ‘staging date’ There are 43 staging dates beginning October 2012 depending on the size of your PAYE as at 1 April 2012 The Pensions Regulator will tell employers their staging date between months in advance.

Auto Enrolment date after As explained in the guidance by the Pensions Regulator you can bring your staging date forward or apply a postponement of up to three months. Transitional delay - effectively postponing auto enrolment until 1 October This can only be used on the staging date for eligible jobholders. Re-enrolment -on the 3 rd anniversary of the staging date and subsequent 3 rd anniversaries thereafter You must contact the regulator in any of these circumstances at What is the difference between the staging date and enrolment date?

Your responsibilities Register with The Pensions Regulator (tPR) within 4 months of receipt of the Regulator’s letter Provide information about auto enrolment to all teachers individually, regardless of whether they’re in the Teachers’ Pension Scheme or not What do you do after your staging date? You must automatically enrol all new entrants into the Teachers’ Pension Scheme Keep records about Auto Enrolment, teachers and the pension scheme for a minimum of six years Be able to provide tPR with information regarding how you have met Auto Enrolment duties Every three years, you must automatically enrol all eligible teachers not contributing to the Scheme on the automatic re-enrolment date with the exception of any teachers who have opted out in the 12 months prior to the re-enrolment date would be enrolled on the next re-enrolment date.

Who has to be enrolled? Since 1 January 2007 all full and part-time teachers automatically join the Teachers’ Pension Scheme. This practice will continue but from October 2012 the minimum age will be reduced to age 16. The TP Regulations have been amended so that when the employer has reached the automatic enrolment date, teachers in non pensionable employment who are “eligible jobholders” (including those who have opted out) should be enrolled into the TPS.

Who has to be Auto Enrolled after ? Existing employees who are not in pensionable employment and are “eligible jobholders”, that is those who are aged 22 to state pension age, earning over £10,000 a year and: Have previously opted out Commenced a part-time contract before , did not make a part-time election and have continued in that contract (without taking up other pensionable employment that would have had the effect of making all of their employment pensionable) This includes pre ill health retirees from when they reach age 60 or cease to be incapacitated, whichever is the earliest Become re-employed before , didn’t make an EFE election and have continued in that contract (without taking up other pensionable employment that would have had the effect of making all of their employment pensionable). Where a teacher has part-time contracts with different employers each employer has to enrol the individual into the Scheme if they are an “eligible jobholder” on the employer’s enrolment date

Multiple posts with the same employer An employer should assess each contract separately, even if they have more than one contract with an individual. If an employer has multiple contracts with the same individual, they will need to consider if the totality of those contracts constitute a single employment relationship with the worker. You may wish to consider taking appropriate advice, if you’re unsure. Where the employer considers that a single employment relationship exists, they will need to treat all The contracts as one contract. If this is not the case, they will need to treat each contract separately. Teachers’ Pensions Note: If you choose to treat each contract within the same establishment separately for Auto Enrolment purposes you will have to split service and salary in respect of each contract to submit to Teachers’ Pensions. Advice from the Pensions Regulator states:

Alternative provisions Current part-time teachers under age 60 who retired on the grounds of ill-health prior to 1 April 1997 and still in receipt of their ill-health pension Where a teacher has a full-time contract with one employer and a part-time contract with another employer, the secondary employer will need to offer an alternative provision in respect of the part-time contract. These two categories of teachers may be enrolled into the LGPS, for more information read paragraph2 of the LGPS Automatic Enrolment Guide. Establishments which have previously elected to participate in the Teachers’ Pension Scheme under Schedule 2 (Part 2) and (Part 3) of the Scheme regulations will continue to have access but may need to offer an alternative provision where they identify that a post is a non Teachers’ Pension Scheme post. You will have to make alternative pension provision for the following workers:

What if someone wants to opt out? The Teachers’ Pension Scheme permits a refund if they opt out within the first three months of becoming a new member or being auto enrolled Any payments made during the opt out period must be refunded to the member and the employer In the case of an existing teacher who has previously opted out, when the employer reaches their enrolment date they must be auto enrolled if they are an “eligible jobholder” Inform members who want to opt out to use my pension on line. If they cannot access my pension on line forms can be downloaded from our website. Employers must not provide opt out forms because this could be seen as inducement. Teachers can re-join the Scheme at a later date. Teachers who have fixed or primary protection, i.e. their pension savings are expected to be more than £1.5 million and they haven’t invalidated their transitional protection certificate; advice from HMRC is that provided the teacher opts out under the scheme provisions i.e.. within 3 month from the date of Auto Enrolment,their certificate will not be invalidated With effect from teachers have to be enrolled before they can opt out – they can’t opt out in advance. This is to allow time to fully consider their pension arrangements

Opt outs Prior to , an opt out covers all teaching employment even if taking up a post with another employer. The teacher remains opted out until they: Opt in or Their employer (after ) reaches the date from which they are required to auto enrol the employee. After , the teacher has the choice of opting out of each contract of employment or in respect of all teaching employment. The teacher remains opted out until they: Opt in or Their employer (after ) reaches the date from which they are required to auto enrol the employee.

Monitoring Aged 22-State Pension Age Working in UK Earning above £10,000 Employers will have to monitor teachers who are not in the TPS and automatically enrol them if they become an “eligible jobholder” as defined above. Advice from the Pensions Regulator is once a teacher has been an active member whilst being an eligible jobholder, if they opt out there is no further need to monitor them but they will have to be re-enrolled on the third anniversary. (Unless they have opted out in the preceding 12 months). Auto Enrolment legislation defines eligible jobholders as follows:

Things to be aware of Maximum accrual of 45 years service – no change Service will continue to be capped at 45 years, however members may continue to participate in the Teachers’ Pension Scheme. They won’t pay contributions but will benefit from life cover without accruing further pensionable service. Maximum accrual of 365 days in a year – no change The Scheme allows for members to accrue a maximum of 365 days pensionable service per year. However, some members work in excess of this when they have a number of part-time contracts that total more than a full-time equivalent year. In such cases all the employment can be pensionable but the service will continue to be capped at 365 days. No change to current provisions

Things to be aware of – changes to TPS from Age Teachers’ Pensions Scheme qualifying criteria will be widened to include year olds. In practice there will be very few people in this age bracket that will become members, however this move will allow us to better align with Auto Enrolment requirements. Multiple Employment - post with more than 1 employer A teacher can decide if they want to opt out of each or all employments. If a person works for more than one employer, an opt out or opt in will be required for the contract with each employer. Concurrent - multiple posts with the same employer A person has a contract of employment with their employer. They may work in more than one establishment or have more than one post within the same establishment. An opt out or opt in is per the contract between the teacher and the employer. Where there is a single employment relationship one opt out will cover all contracts.

In summary… Register with the Pensions Regulator Write to all your employees about Auto Enrolment and what it means for them, template letters are available from the Toolkit on our website Auto Enrol all your eligible non-pensionable workers from your enrolment date Complete the STU AE Template Deduct contributions Identify those that require alternative provisions If teacher doesn’t want to be in the TPS they must opt out after Auto Enrolment. The teacher will remain opted out until they: Opt in or Their employer reaches the date from which they are required to re-enrol the employee, (on the third anniversary of the staging date and subsequent 3 rd anniversaries thereafter) Inform members who want to opt out that they can do so via my Pension On Line or forms can be downloaded from our website and that they remain in the Scheme until we receive this form. Identify your staging date and advise us (this will ensure the AE Template is made available for you when you reach your staging date)

Auto Enrolment Template Access and complete the AE STU Template from the Employer Portal (Templates section; Downloads) Once complete, submit the template via the Employer Portal. If any errors are generated due to mismatch of information, we’ll contact you via an error file accordingly detailing the error identified for action and re-submission as necessary Legally, we’re not able to process any Opt Out due to Auto Enrolment before this detail is received, otherwise it could be construed as coercion If you are auto-enrolling teachers you need to;

Useful Resources Teachers’ Pensionswww.teacherspensions.co.ukwww.teacherspensions.co.uk Department for Work and Pensionswww.dwp.gov.ukwww.dwp.gov.uk The Pensions Regulatorwww.thepensionsregulator.gov.uk/pensions-reformwww.thepensionsregulator.gov.uk/pensions-reform Direct Govwww.direct.gov.ukwww.direct.gov.uk

Any questions?

Our contact details Visit us at: Call us on: Monday–Friday, 8.30am–6pm Write to us at: Teachers’ Pensions Mowden Hall Darlington, DL3 9EE