Transcript Document

Auto Enrolment
V1.4
Contractual Enrolment
Teachers’ Pensions Scheme
Any new employees must be enrolled in the Teachers’ Pension Scheme in accordance with
scheme provisions, regardless of their age and earnings when they commence
employment - unless they have previously opted out - This is known as contractual
enrolment
The Opt Out ceases to apply if they:
• Opt In or
• The employer reaches the date on which they must Auto Enrol them
What’s Auto Enrolment?
Simply, Auto Enrolment …
• Involves employers enrolling eligible workers into a pension scheme on set dates
• It allows people to have another income, on top of the State Pension, when they come to
retire
• Detailed guidance about the employers duties to auto enrol can be found on the Pensions
Regulator’s website – www.tpr.gov.uk
Important Note:
• The majority of teachers are already in the Teachers’ Pension Scheme, so this will not
affect them but you must inform them about Auto Enrolment and their option to opt out
• The Teachers’ Pension Scheme will remain the scheme of choice for employers of
teachers.
What are staging dates?
• Each employer has a date on which to enrol their workers this is known
as their ‘staging date’
• There are 43 staging dates beginning October 2012 depending on the
size of your PAYE as at 1 April 2012
• The Pensions Regulator will tell employers their staging date between 1218 months in advance.
Auto Enrolment date after 1.10.12
What is the difference between the staging date and enrolment date?
As explained in the guidance by the Pensions Regulator you can bring your staging date
forward or apply a postponement of up to three months.
Transitional delay - effectively postponing auto enrolment until 1 October 2017. This can
only be used on the staging date for eligible jobholders.
Re-enrolment -on the 3rd anniversary of the staging date and subsequent 3rd anniversaries
thereafter
You must contact the regulator in any of these circumstances at
[email protected]
Your responsibilities
• Register with The Pensions Regulator (tPR) within 4 months of receipt of the Regulator’s
letter
• Provide information about auto enrolment to all teachers individually, regardless of
whether they’re in the Teachers’ Pension Scheme or not
What do you do after your staging date?
• You must automatically enrol all new entrants into the Teachers’ Pension Scheme
• Keep records about Auto Enrolment, teachers and the pension scheme for a minimum of
six years
• Be able to provide tPR with information regarding how you have met Auto Enrolment
duties
• Every three years, you must automatically enrol all eligible teachers not contributing to
the Scheme on the automatic re-enrolment date with the exception of any teachers who
have opted out in the 12 months prior to the re-enrolment date would be enrolled on the
next re-enrolment date.
Who has to be enrolled?
Since 1 January 2007 all full and part-time
teachers automatically join the Teachers’
Pension Scheme.
This practice will continue but from October
2012 the minimum age will be reduced to
age 16.
The TP Regulations have been amended so that
when the employer has reached the automatic
enrolment date, teachers in non pensionable
employment who are “eligible jobholders”
(including those who have opted out) should be
enrolled into the TPS.
Who has to be Auto Enrolled after
1.10.12?
Existing employees who are not in pensionable employment and are “eligible jobholders”,
that is those who are aged 22 to state pension age, earning over £10,000 a year and:
• Have previously opted out
• Commenced a part-time contract before 1.1.07, did not make a part-time election and
have continued in that contract (without taking up other pensionable employment that
would have had the effect of making all of their employment pensionable)
• This includes pre 1.4.97 ill health retirees from when they reach age 60 or cease to be
incapacitated, whichever is the earliest
• Become re-employed before 1.1.07, didn’t make an EFE election and have continued in
that contract (without taking up other pensionable employment that would have had the
effect of making all of their employment pensionable).
• Where a teacher has part-time contracts with different employers each employer has to
enrol the individual into the Scheme if they are an “eligible jobholder” on the employer’s
enrolment date
Multiple posts with the same
employer
Advice from the Pensions Regulator states:
An employer should assess each contract separately, even if they have more than one
contract with an individual. If an employer has multiple contracts with the same individual,
they will need to consider if the totality of those contracts constitute a single employment
relationship with the worker. You may wish to consider taking appropriate advice, if you’re
unsure.
Where the employer considers that a single employment relationship exists, they will need
to treat all The contracts as one contract. If this is not the case, they will need to treat each
contract separately.
Teachers’ Pensions Note:
If you choose to treat each contract within the same establishment separately for Auto
Enrolment purposes you will have to split service and salary in respect of each contract to
submit to Teachers’ Pensions.
Alternative provisions
You will have to make alternative pension provision for the following workers:
• Current part-time teachers under age 60 who retired on the grounds of ill-health prior to 1
April 1997 and still in receipt of their ill-health pension
• Where a teacher has a full-time contract with one employer and a part-time contract with
another employer, the secondary employer will need to offer an alternative provision in
respect of the part-time contract.
These two categories of teachers may be enrolled into the LGPS, for more information read
paragraph2 of the LGPS Automatic Enrolment Guide.
• Establishments which have previously elected to participate in the Teachers’ Pension
Scheme under Schedule 2 (Part 2) and (Part 3) of the Scheme regulations will continue
to have access but may need to offer an alternative provision where they identify that a
post is a non Teachers’ Pension Scheme post.
What if someone wants to opt out?
With effect from 1.10.2012 teachers have to be enrolled before they can opt out –
they can’t opt out in advance. This is to allow time to fully consider their pension
arrangements
• The Teachers’ Pension Scheme permits a refund if they opt out within the first three months
of becoming a new member or being auto enrolled
• Any payments made during the opt out period must be refunded to the member and the
employer
• In the case of an existing teacher who has previously opted out, when the employer
reaches their enrolment date they must be auto enrolled if they are an “eligible jobholder”
• Inform members who want to opt out to use my pension on line. If they cannot access my
pension on line forms can be downloaded from our website.
• Employers must not provide opt out forms because this could be seen as inducement.
• Teachers can re-join the Scheme at a later date.
• Teachers who have fixed or primary protection, i.e. their pension savings are expected to
be more than £1.5 million and they haven’t invalidated their transitional protection
certificate; advice from HMRC is that provided the teacher opts out under the scheme
provisions i.e. . within 3 month from the date of Auto Enrolment ,their certificate will not be
invalidated
Opt outs
Prior to 1.10.12, an opt out covers all teaching employment even if taking up a post with
another employer. The teacher remains opted out until they:
• Opt in or
• Their employer (after 1.10.12) reaches the date from which they are required to auto
enrol the employee.
After 1.10.12, the teacher has the choice of opting out of each contract of employment or
in respect of all teaching employment. The teacher remains opted out until they:
• Opt in or
• Their employer (after 1.10.12) reaches the date from which they are required to auto
enrol the employee.
Monitoring
Auto Enrolment legislation defines eligible jobholders as follows:
• Aged 22-State Pension Age
• Working in UK
• Earning above £10,000
• Employers will have to monitor teachers who are not in the TPS and automatically enrol
them if they become an “eligible jobholder” as defined above.
• Advice from the Pensions Regulator is once a teacher has been an active member whilst
being an eligible jobholder, if they opt out there is no further need to monitor them but
they will have to be re-enrolled on the third anniversary. (Unless they have opted out in
the preceding 12 months).
Things to be aware of
No change to current provisions
Maximum accrual of 45 years service – no change
Service will continue to be capped at 45 years, however members may continue to
participate in the Teachers’ Pension Scheme. They won’t pay contributions but will benefit
from life cover without accruing further pensionable service.
Maximum accrual of 365 days in a year – no change
The Scheme allows for members to accrue a maximum of 365 days pensionable service
per year. However, some members work in excess of this when they have a number of
part-time contracts that total more than a full-time equivalent year. In such cases all the
employment can be pensionable but the service will continue to be capped at 365 days.
Things to be aware of – changes
to TPS from 1.10.2012
Age
Teachers’ Pensions Scheme qualifying criteria will be widened to include 16-18 year olds.
In practice there will be very few people in this age bracket that will become members,
however this move will allow us to better align with Auto Enrolment requirements.
Multiple Employment - post with more than 1 employer
A teacher can decide if they want to opt out of each or all employments. If a person works
for more than one employer, an opt out or opt in will be required for the contract with each
employer.
Concurrent - multiple posts with the same employer
A person has a contract of employment with their employer. They may work in more than
one establishment or have more than one post within the same establishment. An opt out
or opt in is per the contract between the teacher and the employer. Where there is a single
employment relationship one opt out will cover all contracts.
In summary…
Identify your staging date and advise us (this will ensure the AE Template is
made available for you when you reach your staging date)
• Register with the Pensions Regulator
• Write to all your employees about Auto Enrolment and what it means for them, template
letters are available from the Toolkit on our website
• Auto Enrol all your eligible non-pensionable workers from your enrolment date
• Complete the STU AE Template
• Deduct contributions
• Identify those that require alternative provisions
If teacher doesn’t want to be in the TPS they must opt out after Auto Enrolment. The teacher
will remain opted out until they:
• Opt in or
• Their employer reaches the date from which they are required to re-enrol the employee,
(on the third anniversary of the staging date and subsequent 3rd anniversaries thereafter)
• Inform members who want to opt out that they can do so via my Pension On Line or forms
can be downloaded from our website and that they remain in the Scheme until we receive
this form.
Auto Enrolment Template
If you are auto-enrolling teachers you need to;
Access and complete the AE STU Template from the Employer Portal (Templates section;
Downloads)
Once complete, submit the template via the Employer Portal.
If any errors are generated due to mismatch of information, we’ll contact you via an error
file accordingly detailing the error identified for action and re-submission as necessary
Legally, we’re not able to process any Opt Out due to Auto Enrolment before this detail is
received, otherwise it could be construed as coercion
Useful Resources
Teachers’ Pensions
www.teacherspensions.co.uk
Department for Work and Pensions www.dwp.gov.uk
The Pensions Regulator
www.thepensionsregulator.gov.uk/pensions-reform
Direct Gov
www.direct.gov.uk
Any
questions?
Our contact details
Visit us at:
www.teacherspensions.co.uk
Call us on:
08453 003 756
Monday–Friday, 8.30am–6pm
Write to us at:
Teachers’ Pensions
Mowden Hall
Darlington, DL3 9EE