1. Auto Enrolment Webinar 12 th March 2014 Presented by Roger Walker and Amy Dellar Education Personnel Management 1

2.  What is Auto Enrolment?  What will happen on and after the Staging Date?  What Will EPM do as the service provider?  What will Schools need to do?  Useful links Overview 2

3. What is Auto Enrolment?  Auto-enrolment refers to the arrangements that the Government have introduced for pension provision, designed to help people save more for their retirement. It is mandatory for Employers to apply the provisions of the auto-enrolment legislation.  It does not replace the contractual arrangements enforced by the Local Government Pension Scheme (LGPS) or Teachers’ Pension Scheme (TPS) and introduces considerations on top of the scheme rules. This will apply to those who are currently not contributing to a scheme and each contract of employment will need to be assessed separately. Auto Enrolment 3

4. Auto Enrolment does not replace the Contractual Enrolment obligations: Teachers: All newly appointed teachers between the age of 16 and 74 (inclusive) MUST be enrolled in to the Teachers’ pension scheme from their date of appointment, irrespective of their earnings, unless they are either:  A pre April 1997 ill health retiree who has been re-employed on a part time basis and is still in receipt of their pension whilst aged under 60  A teacher with a full time contract with one employer who also holds an additional part time contract, in such cases the employer of the part time contract will need to offer an alternative pension provision whilst the Teacher continues to hold the other full time post. Contractual vs Auto Enrolment 4

5. Auto Enrolment does not replace the Contractual Enrolment obligations: Support Staff  All newly appointed support staff under the age of 75 MUST be enrolled in to the Local Government Pension Scheme from their date of appointment, irrespective of earnings, unless they are on a contract of less than three months.  Staff on contracts of less than three months will need to be postponed due to the LGPS contractual scheme regulations but may choose to opt in should they wish. This will include casual / relief support staff. Contractual vs Auto Enrolment 5

6. Employers have to apply the auto-enrolment provisions for any member of staff who meets the following criteria:  Those currently not contributing to a qualifying pension scheme (LGPS/TPS)  earns over £9440 per annum, £787 per month (£10,000, £833 per month from April 2014) per contract of employment.  are aged 22 or over, and  are under state pension age. Staff who met these criteria are known under the regulations as: ‘eligible job holders’ Any job holder that does not meet the criteria above that is not currently a member of the pension scheme will need to be monitored on a monthly basis to assess whether they trigger the auto enrolment. If the triggers are met, then they will be auto enrolled for the pay period for which they are deemed eligible. Who does Auto-Enrolment apply to? 6

7.  Auto Enrolment duties commence on the Staging Date  The Staging date is determined by the size of the employer’s PAYE scheme on 1 st April 2012.  For employers that operate a number of PAYE references, the Staging date is determined by the largest scheme that existed on 1 st April 2012. To Find your Staging Date enter the relevant PAYE number into Staging Date CalculatorStaging Date Calculator When is Auto Enrolment effective from? 7

8. Employers have a number of options available to them:  Enrol eligible job holders  Apply the transitional delay period and defer eligible staff until 1 October 2017  Postpone Auto Enrolment duties – for a maximum of 3 months  Bring the Staging Date forward EPM will assess all staff and the action taken will depend on which option has been taken.  On the Staging Date, all staff will be written to, informing them how they are individually affected by Auto Enrolment based on the decision taken by the employer What Will happen on the Staging Date 8

9.  Scale of the impact - Volume of those currently not in a scheme  Number likely to opt in Vs Number likely to opt out and associated Employer costs  The timing of the staging date  Contracting out of the State Second Pension (S2P) will cease from April 2016, so NI contribution rates will not be reduced for pensionable employees and employers from that date. Things to consider when selecting the option 9

10. If you choose to enrol:  All workers assessed as eligible will be enrolled into the relevant scheme (LGPS or TPS)  Any staff that are not deemed ‘eligible’ will need to be monitored against their earnings and age each month. As soon as they become ‘eligible’ they will be automatically enrolled into the scheme.  Staff can opt in at any time so long as the scheme rules allow  Pensionable employees will remain in the scheme. 10

11. If you choose to defer:  All workers assessed as eligible will be deferred and not enrolled into the relevant scheme (LGPS or TPS) until they are re-assessed in October 2017.  Any staff that are not deemed ‘eligible’ will need to be monitored against their earnings and age each month. As soon as they become ‘eligible’ they will be automatically enrolled into the scheme.  Staff can opt in at any time so long as the scheme rules allow  Pensionable employees will remain in the scheme. 11

12. If you choose to postpone:  You will delay the Auto enrolment duties and assessment until your chosen deferral date, which can be up to 3 months from your Staging Date  From the Deferral date you can then choose to enrol or defer as detailed previously. 12

13. If you choose to bring your Staging Date forward:  EPM will still need to know if you would like to enrol or defer  If this option is chosen, you must inform the Pensions Regulator at least one month prior to the revised Staging Date 13

14.  Once enrolled, an employee can opt out of pensions for the contract that they have been automatically enrolled against. If employees opt out within 3 months of being enrolled, they will receive a full refund through payroll.  Once an eligible employee has opted out of the pension scheme, they will not be re- assessed under that contract until the re-enrolment date (3 years from the staging date)  Opt out forms cannot be completed prior to an employee being enrolled into the scheme  Any employees not in the pension on the re-enrolment date (3 years from the staging date), other than those deferred if the re-enrolment date is before 1 October 2017, will then be re-assessed and re-enrolled if they are then deemed eligible on the re- enrolment date. Once enrolled… 14

15.  We will write to all employees held on our system on behalf of the employer, on the staging date to confirm how they are affected by Auto Enrolment and whether they are to be deferred, enrolled or monitored  We will monitor staff held on our system on a monthly basis based on the information that we hold entered via our portal. If those that are being monitored are deemed ‘eligible’, we will auto enrol them for the relevant period and write to them.  We will monitor all earnings each month – overtime, supply, extra activity, payments to casuals, arrears, increases in salary, etc  We will also monitor ages – 22 and Stage Pension Age What will EPM do as part of the payroll service? 15

16.  Upon conversion, under contractual rules, all support staff must be enrolled into the LGPS scheme.  If the academy is not joining a trust, it will obtain a new staging date set in the future as a newly founded company.  If the academy is joining a Trust which has already staged, all ‘eligible’ teachers will also be enrolled into TPS upon conversion.  If the academy falls under a trust who is yet to reach their staging date, contractual enrolment may apply, and the academy will adopt the Trust’s set staging date. Converting to an Academy after Staging Date 16

17.  Inform EPM which option has been taken (Enrol, Defer, Postpone, Bring Forward)  Register with the Pensions Regulator – EPM can assist, but this will be employer’s responsibility  Ensure that all staff are entered onto our portal in a timely manner  Ensure that all variances (overtime, supply work, extra activities) are processed and paid in a timely manner  As a reminder, you should not supply staff with opt out forms as this could be deemed as inducement  Auto Enrolment applies to all workers, which may include self-employed or contracted staff. Please review your working arrangements for any you pay directly, as they could fall under Auto Enrolment provisions. EPM can only monitor those whose pay details we hold centrally.  The only workers in the school likely to be exempt from the requirement for assessment under auto-enrolment are those staff employed by another employer, for example a teacher employed through an agency and you are paying the agency for their time, not the teacher directly. What will the employer need to do? 17

18.  Under LGPS scheme rules, casual support staff cannot be automatically enrolled into the scheme on the first day of employment (or on your auto-enrolment date) as their employment is expected to last for less than three months, but they can opt in at any time.  To comply with Auto Enrolment, you can postpone for upto 3 months  EPM can provide you with a claim form notice  Zero hours contracts? Casual Support staff 18

19. ActionRequired by (from April 2014)Completed by Register with regulator5 months from Staging DateEmployer Write to all pensionable staff2 months from the Staging DateEPM will provide school with the appropriate letters Write to all categories of non- pensionable staff (Eligible, non- eligible) Within 6 weeks from Staging DateEPM will provide school with the appropriate letters Issue postponement notice to staffWithin 6 weeks of employee being postponed EPM can provide template claim forms to provide to casual support staff Write to staff if they become eligible after the staging date Within 6 weeks of being enrolledEPM will send the relevant letter to the school Register with regulatorWithin 2 months of re-enrolment date Employer Communication and deadlines to be aware of 19

20. Example 1  A Teaching Assistant starts a permanent contract at a school on 2 nd June, her salary is £15,000 and she is 21 years old. The school is LA maintained and auto enrolled in 2013. Contractually enrolled The Hokey Cokey 20

21. Example 2  The Teaching assistant opts out on 4 th July and the form is submitted to payroll before the payroll deadline Employee receives a refund and as she is only 21, and must now be monitored for auto enrolment as she is non-eligible The Hokey Cokey 21

22. Example 3  On 2 nd August the Teaching Assistant celebrates her 22 nd Birthday The employee becomes ‘eligible’ and is automatically enrolled  The employee opts out on 8 th August before the payroll deadline and contributions are not deducted. She will not be re-assessed for auto-enrolment until the re- enrolment date in 2016 The Hokey Cokey 22

23. Example 4  On 1 st September 2014 the school converts to an academy The employee is contractually enrolled back into the LGPS pension scheme and must opt out again if they do not wish to be in the scheme. The Hokey Cokey 23

24. Can an employee opt out once they are enrolled?  Yes, employees will have 3 months from the month of enrolment to opt out of the scheme to receive a full refund. They will need to complete an opt out form dated after the time that they become eligible What earnings are monitored to trigger Auto Enrolment?  Salary, overtime, bonuses, statutory pay, extra activity payment, Allowances…etc (Easier to say Mileage and Expenses are the only elements not included) Can an employee who is not eligible opt in at any time?  Yes, any employee can opt into the scheme at any time – even casual employees. Auto Enrolment FAQ’s 24

25. What happens when a person paying into the pension reduces their pay?  The earnings trigger only applies when the threshold is exceeded, causing the eligible employee to be auto-enrolled. If the earnings drop below the threshold, their pension status will not be affected and they will remain in the scheme. What happens if an employee that is not contributing to the scheme has multiple contracts of £2000, £5000, £10000 per annum?  The contracts will all need to be assessed separately. Based on the assessment, the £10,000 post would be eligible for auto-enrolment and would be enrolled. If the employee then opted out of the enrolled post, it would not need to be monitored again until the re-enrolment date. However, the £2000 and £5000 posts would need to be monitored each pay reference period and auto-enrolled if they trigger the eligible criteria Auto Enrolment FAQ’s 25

26. The Pensions Regulator http://www.thepensionsregulator.gov.uk/ Local Government Association Auto Enrolment Guides http://www.local.gov.uk/web/workforcelibrary/technical- guides Teachers’ Pensions https://www.teacherspensions.co.uk/employers/employer- faqs/auto-enrolment.aspx Useful links 26