Shoosmiths Automatic Enrolment through the lens of a Pensions Adviser
Heather Chandler Partner Shoosmiths LLP
Confidentiality note The contents of this document should be treated as strictly confidential
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Topics to be covered 1. Salary Sacrifice and auto-enrolment. 2. Contractual obligations •
TUPE transfers
•
opting out of auto enrolment
•
employment contracts
3. Making the right provision decision •
existing scheme vs new scheme
•
choosing a provider
•
moving from one scheme to another
4. Case studies of client experiences
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Salary Sacrifice and auto-enrolment Contractual agreement between worker and employer Worker sacrifices part of salary in return for a non-cash benefit Reduced National Insurance Contributions Employer may pass saving on to employee Cannot take someone below National Minimum Wage
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Salary Sacrifice and auto-enrolment Salary sacrifice arrangements can be run alongside auto-enrolment BUT they must be treated separately Recommended: Keep communications on salary sacrifice separate to autoenrolment communications Salary sacrifice arrangement cannot be a barrier to entry or an inducement to opt-out Assess on pre-sacrifice salary Pay contributions on post-sacrifice salary
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Contractual Obligations
TUPE Transfers
Opting out of auto enrolment
Employment contracts
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Contractual Obligations TUPE Transfers
Contributions
Duty to auto-enrol following transfer? Company A transfers employees to Company B Scenario 1: Both companies have passed their staging dates Scenario 2: Neither company has reached its staging date Scenario 3: Company A has passed its staging date, Company B has not Scenario 4: Company B has passed its staging date, Company A has not
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Contractual Obligations Opting out of auto-enrolment
Statutory opt-out process
Cannot opt-out of auto enrolment altogether
High earners
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Contractual Obligations Employment contracts
Contractual alternatives to pension contributions
Possible inducement to opt-out
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Making the right provision decision
Existing scheme vs new scheme
Choosing a provider
Moving from one scheme to another
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Making the right provision decision Existing scheme vs new scheme
Existing defined benefit or defined contribution scheme Amendments required? Amend for all employees or just those to be auto-enrolled? Consultation required? Self certification of existing scheme
New defined contribution scheme Often set up by a third party provider May be trust based (under a master trust) or contractual (such as a GPP)
NEST (National Employment Savings Trust) Government scheme (other similar schemes are available)
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Making the right provision decision Choosing a provider
Qualifying scheme?
Costs?
Benefits?
Investment choices?
Flexibility?
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Making the right provision decision  Moving from one scheme to another 
Communication
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Case studies of Client Experiences
Case study 1 Irregular pay reference periods
Case study 2 Dealing with contractual enrolment alongside auto-enrolment
Case study 3 Overseas workers
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