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Could employees be responsible for choosing their auto-enrolment provider?

For those with an interest in pensions and, in particular, the practicalities of auto-enrolment, this week has brought some interesting suggestions on making the whole thing work a little more smoothly. One of the main stumbling blocks to truly integrated pension saving has been that the current auto-enrolment system treats workplace pensions as just that. They are something put in place by your employer and when you change employers your pension pot can be stranded or at the very least difficult to move from place to place. This is inefficient and means that many employees have small savings pots scattered around multiple employers given the way the employment market works in the real world.

Previous suggestions to deal with this have included variants of ‘pot follows member’ whereby there would be an automatic transfer when an employee changes employment, but this runs into immediate issues around member choice and comparative management charges. Why be forced to move to a scheme with a higher annual management charge or one that doesn’t offer the investment choices you want – plus costs!

The new suggestion would be to make what scheme you use for auto-enrolment an employee rather than employer decision. The employee would pick a personal pension plan (that met basic AE requirements) and the employer’s duties would be to pay into that. When the employee moves – the pension moves.

This could potentially kill two birds with one stone. However, as with most pensions issues, this is unlikely to be top of the government’s agenda and there may well be unanticipated wrinkles in the application of the proposal – for example, how will an individual employee pick a good personal pension scheme without financial advice?

Something to watch for.

 

Could employees be responsible for choosing their auto-enrolment provider?

Supreme Court hears Barnardo’s RPI/CPI Appeal

Dentons' Reward team are advising the Representative Beneficiaries of the Barnardo's Staff Pension Scheme ("the Scheme") in an application to the Supreme Court to decide whether the Scheme rules permit a switch from RPI to CPI for revaluation or indexation of pension payments.
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Supreme Court hears Barnardo’s RPI/CPI Appeal

People, Reward and Mobility – Annual update and diversity review – May 2018

The People, Reward and Mobility team are pleased to invite you to our annual update seminar. Designed to bring you up to date with the latest key developments affecting your workforce, we will review:

  • the top employment cases for 2017 and 2018 and legislative changes, together with their implications for your business;
  • key changes in pensions and other employee reward schemes and their effects on your business;
  • the latest implications from Brexit on immigration matters, including what you can be doing now to be prepared; and
  • diversity and inclusion, with a spotlight on what #MeToo means for your business and gender pay gap reporting, a year into the regime.

The seminar will be preceded by a breakfast buffet and an opportunity to network. We will hold a complimentary legal clinic after the event.

For further information (including dates), please visit our Events page:

Events

People, Reward and Mobility – Annual update and diversity review – May 2018

Pensions Regulator consults on master trust authorisation regime

Master Trusts are a popular way for employers to meet their auto-enrolment obligations. They are basically pension schemes providing money purchase benefits to non-associated employers. The process for signing up is usually simple with standardised documents for new joiners, although they can need a brief legal check and explanation given that they are trust deeds so you should know what you're agreeing to. Master Trusts follow a 'pensions as a service' model, like a group personal pension, but are regulated as an occupational pension scheme rather than a personal pension as they are trust based.
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Pensions Regulator consults on master trust authorisation regime

Improving the Pensions Regulator– Increase Powers or Increase Resource?

Recent high profile insolvencies (e.g. Carillion and BHS) have seen widespread criticism of the Pensions Regulator ("TPR"). It stands charged with failure to use its intervention powers despite being aware of companies prioritising dividends over deficit recovery contributions, despite trustees urging it to intervene. By the time TPR took action it was too late.
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Improving the Pensions Regulator– Increase Powers or Increase Resource?

Don’t forget to sign up to our May 2018 annual update and diversity seminar

Don’t forget to sign up to our May 2018 annual update and diversity seminar

Pensions – auto-enrolment contributions edge upwards

We are now seven weeks from the first hike in the “minimum” requirements for auto-enrolment compliance (6 April 2018). In practical terms, for employers currently applying those statutory minimums this means that your employees will see an increase in their pension contributions from one per cent of their annual earnings between £6,032 and £46,350 (based on the 2018 figures) to three per cent.

This could come as something of a shock for employees who didn’t read the fine print on their auto-enrolment announcements as it will mean less money in their April pay packet (though more going into their pension savings).

There’ll also be an increase in the amount you have to pay in as an employer from one per cent of those banded earnings to two per cent.

Again, in practical terms, where staff are affected by this change in contributions it might be sensible to highlight this before the changes take effect noting that this is a statutory requirement. And of course we have a similar issue to look forward to in April 2019, when three per cent for employees and two per cent for employers become five per cent and three per cent respectively.

Just as a reminder, the Pensions Regulator has the ability to fine employers who don’t meet their auto-enrolment obligations and has recently announced a mix of fines and backdated contributions accruing to a bus company in excess of £32,000. Given that the employer had 35 staff it shows that it pays to be compliant with these legal obligations and it’s never a bad time for a review.

Pensions – auto-enrolment contributions edge upwards

UK Employment Law Round-up – February 2018

In this issue we look at some of the key employment law developments that have been taking place over the past month. In particular, we take a look at the outcome of Matthew Taylor’s review of modern employment practices and the Fawcett Society’s report on potential gaps in current sex discrimination legislation in the UK. The second of these is particularly significant in light of the growing movement to raise awareness of sexual harassment in the workplace. We also give you our top tips for getting your organisation ready for the implementation of the GDPR, which is now only three months away(!), and the first hike in the “minimum” requirements for auto-enrolment compliance.

https://www.dentons.com/en/insights/newsletters/2018/february/28/uk-employment-law-roundup/uk-employment-law-round-up-february-2018

UK Employment Law Round-up – February 2018

Pensions Highlights

Rather than concentrate on any particular point this month I've set out a few things that have happened in the pensions world in the last month or so.
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Pensions Highlights

So, where’s “mutual agreement” on this pension form?

Pensions and Employment speak different languages and as an employer it's important to have a team working for you that understands both. A recent example arose in the Pensions Ombudsman case of Mr. O (PO-7782).
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So, where’s “mutual agreement” on this pension form?