Archive for the ‘NEST’ Category
Early feedback from NEST CEO on new pension rules
Speaking at the Institute of Directors Conference recently , Tim Jones, CEO of NEST said:
‘From our experience with employers, it is clear that they need to give themselves as much time as possible to get ready. We recommend up to 18 months and advise they pull together a team from across the organisation who can help meet their duties.’
NEST is working with over 300 employers, with 100 of these being large employers in the first stages of implementing automatic enrolment. These include household names such as BBC, BT, McDonalds, NPower, Iceland and Travelodge, and employers from a wide range of sectors, such as Barchester Healthcare, Compass Group and Mitchells and Butlers.
Tim also announced four more names of employers to have chosen NEST for their automatic enrolment duties, namely: Balfour Beatty, Four Seasons Health Care, Spirit Pub Company and The Open University.
Reflecting further on lessons learnt so far, Tim drew attention to the need for employers to make sure they work with their payroll providers and in-house teams to get the ‘right data in the right format’.
Comment from 44 Financial:
It’s clear that to successfully deliver a compliant auto-enrolment project medium size employers will need between 12 and 18 months. If you have a staging date in 2014 you need to have started the project by now.
Auto-Enrolment–Webinar
It’s crucial that the way that automatic enrolment interacts with existing employment contracts is fully understood. The key difference is that contractual enrolment requires a worker’s consent to be enrolled into a pension scheme, whereas automatic enrolment does not.
Join Neil Esslemont and Andy Nicholls from the regulator’s industry liaison team as they outline the different processes for contractual and automatic enrolment.
This free webinar, on Friday 22 March at 11.00am, will include the relevance of opting out and postponement to these processes, communicating membership to workers, and identifying whether an existing scheme qualifies for automatic enrolment. There will also be an opportunity to ask questions.
Only 8% of Asda employees opt-out
According to the supermarket giant only 8 per cent of its eligible workforce opted-out of the new rules on pension enrolment. Asda was one of the first UK employers to reach it’s staging date.
According to Asda the helpline they set up got calls from about 3% of the workforce during the opt-out period. Asda had conducted a comprehensive communication programme designed to explain the changes and emphasise that this was not a pay cut.
This level of opt-out is well below the 20-30% predictions we have seen. Only last month the consultants to the largest employers who had reached their staging date were quoting opt-out rates of up to 10%.
Will pension compliance cost you 10% of payroll?
Auto-enrolment could increase employers’ payroll costs by 10% according to research from Eversheds.
The legal firm surveyed 245 companies and found that more than half thought the cost of complying with the new pension rules would be as high as 10% of payroll. The biggest challenge was though to be the additional administration required.
Nearly 60% of those surveyed said they wouldn’t reduce costs by limiting future pay rises. However 16% said they would consider it.
On a positive note the 93% were confident they would be ready by their staging date.
Two of the biggest challenges were getting key messages over in simple terms and getting workers to understand the reasons behind automatic enrolment.
About a third of companies thought it likely that they’d have to communicate different messages to different categories of workers.
When asked the one thing they’d change 41% said they’d allow workers to opt-out before being enrolled. Another 20% wanted the earnings threshold to be removed from the eligibility criteria, so that employers would not have to continually monitor workers’ earnings.
Steve Clark
Huge numbers of workers may be missed out of auto-enrolment
The Pensions Regulator published guidance earlier in the year warning employers preparing for Auto-Enrolment (AE) that they could not rely solely on a person’s tax status or any other single factor to determine if they were a worker or self-employed.
There is now evidence from a number of actuarial consultants and legal firms that companies could be missing large numbers of eligible workers out of their auto-enrolment plans because they wrongly believe they are classed as self-employed or consultants.
Reports suggest that the audit of one client’s workforce had identified 1,000 extra eligible workers that the company did not realise would have to be auto-enrolled. Another audit at a firm uncovered an additional 500 people needing to be enrolled – increasing the total number by about 10%. This prompted comment that, “the best advice is that if it looks like a worker and smells like a worker, it is a worker.”
The designation of someone as self-employed doesn’t necessarily mean they are and other factors need to be considered including the number of hours and the location of work, the pay structure agreed and factors such as whether the person is provided with tools, a uniform or business cards.
The list of status indicators given by the Pensions Regulator is clearly not exhaustive and businesses are warned that in cases of doubt the watchdog would probably take the most cautious interpretation and class any group in question as workers.
Sources: www.professionalpensions.com