Www.fsbpensionservices.co.uk FSB Pension Scheme for Members A Simple Solution To What Could Be A Complex Problem …… Presented by Paul Baker IFS Employee

www.fsbpensionservices.co.uk

FSB Pension Scheme for Members

A Simple Solution To What Could Be A Complex Problem ……

Presented by Paul Baker

IFS Employee Benefits LLP

FSB Pension Services


Agenda

1. Introduction – who are we ?

2. Background – how did we get here ?

3. Auto-enrolment – the BASIC facts.

4. Employer responsibilities – the BASIC facts.

5. The FSB Solution.

6. Questions.


Who are FSB IFS ?

National IFA

– Part of AFH Financial Group PLC, regulated by the FCA.

– Appointed by the FSB since 1997.

– Experts in Workplace Pensions.

– Providers of the FSB Pension Scheme for Members.


Why Auto enrolment ?

The Pension Gap - Three Government Initiatives

– Raise State Pension age.

– Fixed rate pension.

– Workplace Pensions.


Auto enrolment ?

Workplace Pensions

– Law.

– Every Employer Affected (even if you only have one employee !)

– Thin end of the wedge ?


“The employer must make prescribed arrangements by which the jobholder becomes an active

member of an automatic enrolment scheme...”

The Pensions Act 2008 Section 3(2)

The New Employer Duties


Key Facts – Staging Dates

• All employers allocated a staging date.• Based on last 2 digits of Employer PAYE ref no*.• Cannot be delayed.• Can be brought forward.

Up to 29 employees – Jan 2016 to April 2017.

* e.g. 913/WZ5121A


Key Facts

• All employers with ‘workers’ must comply with the new rules. • Most employers will have to set up a QWPS.• Employers must auto enrol all eligible employees.• Employers must inform other employees of their rights.• Pay contributions if employees don’t ‘opt out’.• Pensions Regulator will enforce.• Penalties for non-compliance.

NO CHOICE – ALL EMPLOYERS

MUST COMPLY


Key Facts – ‘Workers’

1. An employee, or;

2. Someone who has a contract to perform work or services personally, that is not undertaking the work as part of their own business.

NOTE: A limited company with no employees and one director is excluded.LLP partners are included.Normal partners are excluded.


Key Facts – Assessment

At your staging date AND EVERY pay period thereafter

• All employees MUST be assessed.

• Dependent upon age / salary – they are categorised and must be informed of their rights.

• Records kept.


Entitled Workers

Any age and earn less than £5,824 pa (in any pay period)

So, £485 / month or £122 / week

THEIR RIGHTS

• They have to be offered a pension scheme.

• If they want to go in they can BUT the employer does not have to contribute (they may – but its up to them).



Non-Eligible Job Holders 1. Under age 22 – or over State Retirement Age, and earning

over £10,000 p.a. (£833 / mth or £192 / week)

2. Any age and earning more than £5,824 pa but less than £10,000 (in any pay period).

THEIR RIGHTS

• They have to be offered a pension scheme

• If they want to go in they can AND the employer HAS to contribute (but so does the employee !!)



Eligible Job Holders

Over 22 and under State Retirement Age and………..

Earning more than £10,000 pa (in any pay period - £833/£192)

THEIR RIGHTS

• They MUST be AUTO ENROLLED into the pension scheme.

• They and the employer must contribute.

• THEY CAN opt out .



Key Facts – Contribution Basis

Four Choices :

1. Qualifying Earnings – between £5,824 & £42,385 (2015/16)

2. Basic Pay (Tier 1) – Basic + holiday pay + benefits BUT no bonus / commission/overtime (min = basic Pay)*.

3. Basic Pay (Tier 2) – as Tier 1, but must be at least 85% of TOTAL pay.

4. Total Pay (Tier 3) – all payments (P60)**.

YOU AS THE EMPLOYER CAN (NEED) TO CHOOSE

*Note – this has higher levels of employer contributions **Note – this has lower employee contributions


Minimum contributions (based on Qualifying Earnings) are :

E’er E’ee Taxman TOTAL

Up to Oct 17 1% 0.8% 0.2% 2%

10/17 – 9/18 2% 2.4% 0.6% 5%

From 10/18 3% 4% 1% 8%

Notes :

1. Employer has to pay minimum total.

2. Employees pay net of tax rebate.

Key Facts – Contributions


1. The Employer CANNOT be involved in the process.

2. Eligible Employees HAVE to be auto-enrolled before they can opt out.

3. ONLY the employee can ‘opt out’.

4. They are given the process as part of the auto enrolment communication

5. They can opt out anytime within 4 weeks of their notification from their

employer and get a full refund – after that no refund.

6. They can only opt back in once in any 12 month period.

7. They MUST be auto-enrolled again (by the employer) every three years.

Key Facts – Opting Out


Key Facts - Postponement

NOTE: this does NOT allow you to postpone your Staging Date

All QWPS can be set up on a postponement basis – this means UP TO

THREE month’s grace on contributions starting:

• from staging date*.

• when new employees join*.

• if employees become eligible*.

*staff still need correct documentation at staging / joining date.

Great for probationary periods, temp/seasonal staff, employees

moving in/out of eligibility.


Final Important Point

Importance of A/E support software

– Either use Pension Provider’s or

– Get Payroll’s.

– CRUCIAL to get the payroll output into correct format for provider.

– Process sits better in payroll ?


AUTO ENROLMENT IS THE

RESPONSIBILITY OF THE EMPLOYER –

NOT THE GOVERNMENT OR THE PENSIONS

INDUSTRY

Key Facts – Responsibilities


So what do you need to do ?

Start Planning

• Find out your staging date.• Decide when to start the process of complying.• Choose a QWPS (your choice – only one

required)• Set the parameters of your scheme.• Implement it.• Get Help !

The Rules are complex – The FSB can help


Choosing a QWPS

The FSB Pension Scheme for Members

• Launched April 2013.• Arranged by IFS (UK) Ltd.• Provided by Legal & General• Unique service – support, guidance and

help all the way to Staging Date• www.fsbpensionservices.co.uk

We take the headache away !


The FSB Pension Service

An Overview

• EXCLUSIVE SERVICE - only FSB Members can use.• COMPLETE SUPPORT – at a sensible cost.• Access a Major UK Pension Provider. • Open to all - No Minimum contribution or employees.• Start contributions when you want (subject to AE rules). • Selected default investment funds.• Built in investment strategy.• 100% allocation - £100 paid in £100 allocated.• Competitive Charges – one single charge = 0.5% amc.• Easy to set up & run.


What do we do ?

A complete service – end to end ….• Detailed guidance on a/e and the FSB Scheme (via email

or post or both)• Helpline – manned by auto enrolment experts• Individual telephone interview, with an expert to :

Talk you through the choices / decisions you have to make Ensure you fully understand everything about a/e and the FSB

scheme Answer any queries that you may have Set the scheme up - the way you want Ensure you payroll is correctly configured

• Guide you through to your first contribution payments.


SME’s The Main Concerns

Key Questions

1. How much will it cost ?

- How much to set it up ?

- How do I run the scheme ?

- How much do I need to put in ?

2. Is it a decent Pension Scheme ?


How Much Will It Cost ?

THREE ELEMENTS :

1.Set up fee.

2.Ongoing Administration cost.

3.Contributions.



THREE ELEMENTS :

1.Set up fee – from £399+vat.

2.Ongoing Administration cost

3.Contributions

FSB PSfM = EXCEPTIONAL VALUE



THREE ELEMENTS :

1.Set up fee – from £399+vat

2.Ongoing Administration fee.

3.Contributions

Legal & General – pensions software – FOC !

BUT – it may be ‘better’ within payroll.



THREE ELEMENTS :

1.Set up fee

2.Ongoing Administration fee

3.Contributions.



THREE ELEMENTS :

1.Set up fee

2.Ongoing Administration fee

3.Contributions

Employer starts @ 1% rises to 3%


Is It A Good Scheme ?

THE FSB SCHEME HAS TERMS AND CONDITIONS ARRANGED SPECIALLY FOR FSB MEMBERS – USING THE ‘BUYING POWER’ OF 200,000 MEMBERS !!

Includes :• No minimum number of employees.• No minimum contributions.• Set it up now – start payments later.• Access to a traditional provider (with c.200 years

exp.).• No need to pay high fees for advice.• Easy to set up with personal support all the way.


Is It A Good Scheme?

Legal & General – Award Winning Schemes

Auto Enrolment Provider of the Year 2013 and 2014 (Pension / Investment Awards)

Workplace Savings Provider of the Year 2013(WSB Awards)

Group Pension Winner 2013 (Standard Awards)

…and numerous other industry awards…


Why do it now ?

• Capacity Issues.

• Takes time to set a scheme up.

• Chance to plan properly.

• Better Pension Outcome for employees.

• Avoid the fines.


Capacity Crunch – The Tsunami !

Market update


Large fines will apply for businesses who do not adopt an auto-enrolment workplace pension scheme and start contributions by their staging date.

After an initial warning, a £400 fixed penalty, and then £500 / DAY for firms with 5 or more employees.

Why Do It – The Stick !

http://www.google.co.uk/url?sa=i&rct=j&q=stressed+person&source=images&cd=&cad=rja&docid=8MOBYJbaGXP_CM&tbnid=r-4Z4QBB-txNkM:&ved=0CAUQjRw&url=http://www.thenutritionpost.com/health/reactions-to-stress-could-affect-health-10-years-later-study-finds.html&ei=liAdUbewGeeU0QXfiICwAg&psig=AFQjCNEDCpuiirWLEh3TPaYwMqo5UsJY1g&ust=1360949719728355


Common Responses

• “I’m not a member – can I still use the service?”• “I’ll Wait”. • “I’ve spoken to the staff and they don’t want one”.• “I can’t afford one – neither can the staff”.• “The forms are too long and its complicated”.• “I don’t want to see an adviser”.• “I want to see an adviser?”• “Can I join it myself ? ”• “Can I get out of doing this ?”


FSB Pension Scheme for Members

A Simple Solution To What Could Be A Complex Problem ……


Other Services

• Staff Presentations – avoid you getting all the questions*. • 1-2-1 clinics with your employees*.• Transfer services for existing pensions*.• Individual advice to you, or your staff, on personal financial

matters such as life cover, income protection, mortgages, investments, tax and retirement planning.

• Advice to your company on employee benefit packages, such as Group Life Schemes, Permanent Health Schemes or Medical Plans.

* There may be additional fees to cover this work.


Compliance Message

• The FSB Pension Scheme for Members has been arranged for you to help their members comply.

• We are NOT saying that it is the most suitable for you or your employees – WE are NOT giving ‘advice’ - that is why the fees are so low.

• We will provide enough information for you and your employees to make an informed decision.

• If you are unsure or feel more advice is needed, please contact 0808 100 1613 – but note, there will be a fee for advice.

• The information in this presentation is based on our current understanding of current Legislation, Draft Regulations and Consultation Documents. These may be affected by future changes.

Independent Financial Services (UK) Ltd is part of AFH Financial Group plc, which is authorised and regulated by the Financial

Conduct Authority


Any Questions ?