22/01/2015 11 October 2016

Rich Cooper Jamieson Christie Chartered Financial Planners 22/01/2015 Rich Cooper Jamieson Christie Chartered Financial Planners Rich Cooper Intro – Self– Jamieson Christie Chartered Financial Planners – Employee Benefit consultants Explain journey Jamieson Christie taken to date Next 90 mins run through the key things you need to know about Auto-Enrolment – happy to take questions as we go through the presentation but I may ask you to hold fite if it is covered in the presentation.

Workplace Pensions Summary of the current position on Auto-Enrolment 22/01/2015 Workplace Pensions Summary of the current position on Auto-Enrolment Overview of Employer Requirements Update from “The Pension Regulator” Employer Requirements –The Real Picture Salary Exchange – A Note of Caution Jamieson Christie - How We Can Help

Auto-Enrolment Update 28/04/2015 Auto-Enrolment Update 1.2 million companies climbing the mountain Do you find a guide or go it alone? 10 different routes which one do you choose? Where are we on the Journey - To date: As at the end of April 2015 Around 46,500 employers have completed their declaration of compliance i.e set up their schemes if they had too Around 40,000 have to stage this year. The employers currently staging are those with less than 50 employees and more than 1 there is no pattern of employers until after April 2017 when it is all the new-co’s or new corprate structures that will stage some of which could be significantly larger than 50 Employees Draw parallel of climbing everest - Before you climb Everest you have to set up base camp before the hard work of getting to the peak commences So why is it a major challenge – by the end of this year around 85,000 employers will have set up their schemes in the next two years around 512,000 in 2016 & 788,000 in 2017 will need to set up their schemes What is crazy about this is it goes from about 40,000 a year for 2014 & 2015 to more than 42,000 a MONTH in 2016 and almost 66,000 a MONTH in 2017

Employer Responsibilities 22/01/2015 Employer Responsibilities What are their duties? Employers must: Have a pension scheme Auto enrol some employees and Enrol other employees... ...into an ‘Automatic Enrolment Scheme’ Pay contributions On the face of it the employers responsibilities /duties look straight forward the TPR states that . Employers must: Have a pension scheme Auto enrol some employees and Enrol other employees... ...into an ‘Automatic Enrolment Scheme’ Pay contributions However when you start to look at the real issues and detail which we will do as we go through some of the main issues it soon becomes more of a minefield the TPR guides are very extensive in fact there are 579 pages of detailed guidance for employers – latest update was April 2015 and it is a really interesting read.

Employer Responsibilities 22/01/2015 Employer Responsibilities http://www.thepensionsregulator.gov.uk/employers.aspx Explain Easy to find staging date

Sole Director Companies or No Employees 22/01/2015 Sole Director Companies or No Employees ? Explain Easy to find staging date

Admin duties, do’s and don’ts 22/01/2015 Admin duties, do’s and don’ts Employers Must Employers Must Not Select and provide a suitable scheme for their workers Auto enrol and re-enrol/deduct payments Complete Scheme Compliance Provide information to eligible and non-eligible jobholders Provide information to scheme/provider Process opt outs/make refunds Keep records - 6 years (opt-in and opt-out notices 4 years) Discourage membership Give jobholders the opt-out form Encourage opt-outs Use ‘Prohibited recruitment conduct’ Give advice Lets look at in a bit more detail Talk through key points Highlight – Assessment of workforce –Initial, Ongoing, Triannually Information 3 types of workers Experience of Data in right format Opt-Outs have time limit for being dealt with and premiums refunded Record Keeping 6 years - 4 years

Eligibility Qualifying Earnings AGE < £5,824 £5,824 - £10,000 22/01/2015 Eligibility Qualifying Earnings AGE < £5,824 £5,824 - £10,000 > £10,000 16-21 Entitled Worker Non-Eligible Jobholder 22-SPA Eligible Jobholder SPA-75 Talk through - Eligibility criteria – Highlight action needed if become Eligible – New Starter. /Overtime – Use of postponement

Employer Costs Based on Qualifying Band Earnings Steady State 22/08/2015 Employer Costs Based on Qualifying Band Earnings Steady State Talk though slide - But what does that mean in actual costs – Qualifying earnings all earnings between £5,824 & £42,385 10 Employees on average of £16,000 = £1017 per year initially £3,052 eventually + Admin /Set up costs quick increases between 2017/2018 need to budget for and built into your bottom line

To Use or Not to Use Qualifying Earnings 22/01/2015 To Use or Not to Use Qualifying Earnings Qualifying Earnings have to be used for your initial assessment. They do not need to be used for calculating contributions You can certify using 3 separate tiers

Certification Teir Rule Initial Min Level Min Level From Apr 18 22/01/2015 Certification Teir Rule Initial Min Level Min Level From Apr 18 Min Level From Apr 19 1 Pensionable pay = Basic pay Emp 2% Eee 1% Emp 3% Eee 3% Emp 4% Eee 5% 2 Pensionable pay = Basic pay ( 85% of total pay) Emp 1% Eee 1% Emp 2% Eee 3% Emp 3% Eee 5% 3 Pensionable pay = Total pay Emp 3% Eee 4% Explain certification – levels and Pensionable Earning - Cover off existing scheme certification rules

The Pension Regulator Update 22/01/2015 The Pension Regulator Update

The Pension Regulator Update 22/01/2015 The Pension Regulator Update Each quarter The Pension Regulator gives an update of the compliance position and fines issued. This has seen a massive increase over the last 12 months* *TPR Compliance Update July 2016. Compliance Area Number in last Quarter Total to date Compliance Notices 3,392 11,099 Unpaid Contribution Notice 177 582 Fixed Penalty Notice 861 3,045 Escalating Penalty Notice 38 165

The Pension Regulator Update 22/01/2015 The Pension Regulator Update The Pensions Regulator (TPR) has warned small employers over auto-enrolment staging dates. TPR said around 20% of small employers and almost half of micro employers did not know the exact date they needed to comply with auto-enrolment laws. It has warned employers to start preparing for auto-enrolment 12 months ahead of their staging date, as failure to prepare in good time could lead to a financial penalty. Don’t ignore any compliance or penalty notices

Employer Requirements 22/01/2015 Employer Requirements 12- 9 Months Before Planning Stage Know Your Staging Date Analyse Workforce Understand Your Costs Agree The Scheme Design 9-0 Months Before. Implementation Stage Choose a Pension Scheme Postponement? Prepare Communications Staging Date Staging and ongoing Automatically Enrol Staff Communicate Declaration of Compliance Maintain Records Fulfil Ongoing Responsibilities

Why To Start Planning Early 22/01/2015 Why To Start Planning Early Capacity Issues Know your staging date and work backwards Know the size of the problem Build in the admin/resource/payroll requirements Manage your increased employee costs / salary exchange/reduced pay increases Providers being selective Providers not offering terms to some employers Avoid the possible fines from The Pensions Regulator Get an adviser on board (limited number) Talk Through slide

The Real Picture Planning ahead is key. 22/01/2015 The Real Picture Planning ahead is key. Very large volumes staging from January 2016

The Real Picture - Myths V Reality 22/01/2015 The Real Picture - Myths V Reality Common myths - I Myth All employees need to be enrolled Postponement delays the staging date and there is no need to do anything until then. Employers can work out their own staging date. Pensionable pay is used to determine which category a worker is (e.g. EJH). I can bring my staging date forward to any date. Reality Only Eligible Jobholders need to be enrolled Postponement does not change the staging date (and other duties still apply in this period). Employers are unlikely to know their PAYE size on 1 April12, so should use staging date tool. Qualifying Earnings must be used for assessment, not pensionable earnings. There are fixed dates to which you can bring forward your staging date and specific rules need to be followed.

The Real Picture - Myths V Reality 22/01/2015 The Real Picture - Myths V Reality “It will be best just to use my existing group pension scheme for all my employees”

The Real Picture – Employer Cost Example 22/01/2015 The Real Picture – Employer Cost Example Employer 20 employees – 8 are members of existing pension scheme 3% Employer 3% Employee of basic salary - Payroll is £400,000 Current Cost to employer = £4,800 p.a. Assume uses current scheme and 90% take up, new cost = £10,800 p.a. Set up a separate Auto Enrolment scheme using Qualifying Earnings and Minimum Contribution 90% take up New Cost = £6,217 p.a. Saving over 2 years until next contribution increase = £9,166 Using Postponement saved a further £354 Further savings being made using salary exchange

Salary Exchange Employee earning £20,000 per annum 2% employer & 2% gross employee contribution Employee Exchanges Salary to maintain same take home pay 50% of any employer NI Savings retained by employer A Word of Caution Minimum Wage No Contractual Government Position

The Real Picture - Myths V Reality II 22/01/2015 The Real Picture - Myths V Reality II Common myths - I Myth It will be easy to find a pension provider None of my employees will join My payroll system will do everything for me. Once I have set the scheme up there is nothing left for me to do. Reality Pension Providers are being very selective – For example… Take up rate is in excess of 90% All Providers need data in a specific format – manual intervention will be required. There are a large number of ongoing requirements for employers.

Meeting provider data requirements a challenge 22/01/2015 Meeting provider data requirements a challenge

Meeting provider data requirements a challenge 22/01/2015 Meeting provider data requirements a challenge Providers require employers to upload employee data in a specific pro- forma Requires updating / transferring payroll data into this pro-forma prior to staging Although not difficult, this process was often described as extremely time consuming – often has to be done manually due to: Fiddly formats – extreme precision required around capitalisation and commas or the system will not accept the data (e.g. ‘Mr.’ not ‘Mr’) Entire pro-forma cannot be uploaded until everything is rectified – employer’s responsibility to resolve these issues manually Unexpected glitches e.g. one employer employed a husband and wife who shared an email address; the system would not accept a duplicate email address Non ‘user-friendly’ forms to populate e.g. information not flowing in an order that mirrors the payroll, prohibiting a straight data transfer

The Real Picture –Ongoing Responsibilities 22/01/2015 The Real Picture –Ongoing Responsibilities Every Payroll Period Calculate contributions, create a contribution schedule, advise provider and make payment. Continually Assess Workforce – to check eligibility. Deal with New Joiners, Leavers and Opt-Outs and Opt-Ins. Ongoing Keep Records for 4 to 6 years for different information. Re-enrolment every 3 years. Annual Audit.

Want to know what auto-enrolment really means? 22/01/2015 Want to know what auto-enrolment really means? Let Jamieson Christie help you through the pensions maze. Our Proposition

22/01/2015 Our Basic Proposition Menu based proposition with 3 distinct stages based on the size of the employer Getting Started Report Implementation Ongoing Annual Support

22/01/2015 Our Basic Proposition Menu based proposition with 3 distinct stages based on the size of the employer Getting Started Report – from £625 Implementation – from £600 Ongoing Annual Support – from £650 Versus The Cost of Getting it Wrong – Daily Fines

In Summary Know Your Staging date 22/01/2015 In Summary Know Your Staging date You will need to auto-enrol eligible employees You will need to give non-eligible employees the option of joining. It will cost you a minimum of 3% of qualifying earnings from Apr 2019 Many providers are not prepared to look at schemes with less than 6 months to their staging date There will be a capacity issue (providers/advisors) The opt out rate is less than 10% (what impact will that have on costs) You cannot encourage employees to opt out/not join

In Summary contd. The fines for getting it wrong are high 22/01/2015 In Summary contd. The fines for getting it wrong are high By starting early you remain in control and manage your costs Ensure your contracts of employment are up to date and correct

Auto-Enrolment Summary 28/04/2015 Auto-Enrolment Summary Of course we can take your scheme –we have plenty of room ! Let you be warned….

….could I just ask Any Questions?

22/01/2015 Disclaimer This presentation represents Jamieson Christie Wealth Management Limited’s interpretation of current and proposed legislation and HM Revenue & Customs practice as at the date of publication - these may change in future. Past performance is not a guide to the future. Prices can fall as well as rise meaning you may not get back the value of your original investment. Investment returns may fluctuate and are not guaranteed. The information shown is based upon our understanding of taxation rules and legislation at the time of presentation and is subject to change. Any views expressed by the presenters are their own and should not be taken out of context or relied upon as advice. The purpose of the presentation is to provide information and stimulate debate, it is not meant to be considered as financial advice and no actions should be taken without consultation with a suitably qualified adviser. Full details of the advice services provide by Jamieson Christie are available upon request. Jamieson Christie Wealth Management Limited is a directly authorised company, authorised and regulated by the Financial Conduct Authority, registration number 422773. October 2016