scottish life we’re going through chaenges… for professional advisers only

Scottish LifeScottish Life

We’re going through chAEnges…

For Professional Advisers Only

Know the technical changes affecting auto enrolment

Have an understanding of the main changes affecting the workplace pensions market

Understand how these changes could impact on your business

Learning outcomes

Source: DWP: Better workplace pensions: Further measures for savers, March 2014

Minimum quality standards Charge cap

Deferred Member PenaltiesActive Member Discounts

Transparency Scale

Commissions



Commission &Consultancy Charging (CC)

Commission and CC ban: Timeline

March 2014

DWP Command

paper published

April 2015

Consultancy charging banned

April 2016

Commission banned


Adviser Charging and AE schemes

Adviser charging can be used

Individual advice and normal client agreement required

Are workers paying for advice to the employer?

Is AC paid for workers automatically enrolled?

Unlikely that provider will allow this

Unlikely that FCA / TPR will like this...DWP can legislate

û û

Adviser Charging and AE schemes

Adviser charging NOT banned

Normal client agreement required

Individual advice AFTER automatic enrolment

Individual advice for transfersüDon’t tr

y and replicate

commission/consultancy charging

through adviser charging

Question 1

How many of your client will be affected by this?

a) <5

b) 6 - 15

c) 16 - 25

d) >25


Limited Liability Partnerships(LLPs)

Limited Liability Partnerships (LLPs)


Are members of an LLP “ workers”?

“The immediately striking thing about this case is how much hard work has to be done in order to find that a member of an LLP

is not a worker ...”

Lady Hale

Source: The Supreme Court, JUDGMENT, Clyde & Co LLP and another (Respondents) v Bates van Winkelhof (Appellant)


“Our view is that an LLP should assume that the Supreme Court’s decision is

equally applicable and as such, members of an LLP could be considered workers

for automatic enrolment.”

Source: The Pensions Regulator, Automatic enrolment Compliance and enforcement Quarterly bulletin, April-June 2014

“This ruling applies retrospectively.”


Check TPR guidance, and consider:

Integration within the organisation

Dependence/subordination, and

Exclusivity (ie could the individual provide services to anyone else).

Source: The Pensions Regulator, Automatic enrolment Compliance and enforcement Quarterly bulletin, April-June 2014

Employers in doubt should

seek legal advice!

Question 2

Do you have any clients who will be impacted by thechange in worker definition?

a) Yes, individual clients

b) Yes, corporate clients

c) Both

d) None

Pot follows member “Federated” model

PensionScheme

PensionScheme

Option to opt out

AFTER AE

Data Handler

Data Handler

Data Handler

Data Handler

Transfer House

A new definition of pension scheme:

Pension Schemes Bill

Defined BenefitFULL pensions

promise

Defined ContributionNO pensions

promise

Shared Risk SchemePARTIAL pensions

promise

High Employer Risk High Employee Risk

Collective Benefits Schemes

Employer Cost

Shared Risk Scheme (SRS) Models

Accumulation Decumulation

Money Back

Capital & investment

Retirement income

insurance

Retirement income builder

Collective Benefit Schemes (CBSs)

DCG’TEE

?

Industry/union wide

Aspirational benefit

Guaranteedbenefit

Conditional indexation

Conditional benefits above any guarantee

Source: Department for Work and Pensions, Reshaping workplace pensions for future generations, June 2014


Who’s afraid of TPR?

Key findings – July 2012 to September 2014

33,660 registrations

19,135,000total workers

4,748,000eligible

jobholders

Source: The Pensions Regulator, Automatic enrolment monthly declaration of compliance, October 2014

Compliance notice

Information notice

Fixed penalty notice

Unpaid cont. notice

Inspection

177

10

61 3

Source: The Pensions Regulator, Automatic enrolment compliance and enforcement, 1 July – 30 September 2014

Use of formal powers – July 2012 – Sept 2014(Selected powers used in the period)

6

0

50000

100000

150000

200000

250000

Staging volumes by quarterExcluding new employers

Sources: The Pensions Regulator, “Employer staging forecast”, January 2014NEST insight report 2014

201428,600

201546,300

2016512,000

2017215,000

Market reaction...

• Providers are re-pricing and/or moving to a dual charging structure

• More ‘plug-n-play’ , streamlined AE solutions will come to market to deal with capacity

• Payroll might become the primary source of AE software – providers will need to introduce integrated, seamless data solutions

• Possible secondary market created by:• First re-enrolment dates in 2015• Failure of AE systems• Schemes being re-priced• Providers/advisers exiting market

Action points

• Existing schemes:• What is the charge?• Are active member discounts in place?• What commission is being taken?

• Do you have clients affected by the definition of worker?

• Plan ahead

• Contact Scottish Life: www.scottishlife.co.uk

Question 3

Would you like more information on

a) The changes affecting AMDs, commission and charges

b) How Scottish Life can assist you with designing an

AE solution for your client

c) All of the above

d) None of the above

INTRODUCING OUR NEW BRAND

A FEW WORDS ABOUT OUR

• Scottish Life is rebranding to Royal London.

• Our name may be changing, but the same outstanding products, values and service teams will remain.

• We’re as committed to advisers as ever.

REBRAND

KEY DATES

•New Royal London brand unveiled

•Nationwide, TV, press and outdoor advertising

•Cricket sponsorship starts

MAY

• Ongoing communications with advisers and employers about our rebrand

JUNE / JULY

• Ongoing customer comms starting from Aug

AUGUST

• Scottish Life rebrands to Royal London.

NOVEMBER

32

We look forward to doing business with you for many years to come – as Royal London.

www.scottishlife.co.uk/rebrand

THANKYOU

The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The firm is on the Financial Services Register, registration number 117672. It provides life assurance and pensions and is a member of the Association of British Insurers and the Association of Financial Mutuals. Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street,

London EC3V 0RL. Royal London Marketing Limited is authorised and regulated by the Financial Conduct Authority and introduces Royal London’s customers to other insurance

companies. The firm is on the Financial Services Register, registration number 302391. Registered in England and Wales number 4414137. Registered office: 55 Gracechurch Street, London EC3V 0RL.

Royal London Corporate Pension Services Limited is authorised and regulated by the Financial Conduct Authority and provides pension services. The firm is on the Financial Services Register, registration number 460304. Registered in England and Wales number 5817049. Registered office: 55 Gracechurch Street, London EC3V

0RL.44PR0905 June 14

The information provided is based on our current understanding of the relevant legislation and regulation and may be subject to alteration as a result of changes in legislation and practice as well as the circumstances of the individual.

The figures shown in any case studies are examples only, and while they highlight some of the opportunities for planning, it should be recognised that they are not an exhaustive description of the opportunities or pitfalls.

Important information

Scottish Life is a division of the Royal London Group which consists of the Royal London Mutual Insurance Society Limited and its subsidiaries.

The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The firm is on the Financial Services Register, registration number 117672. It provides life assurance and pensions and is a member of the Association of British Insurers and the Association of Financial Mutuals.

Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street, London, EC3V 0RL.

Royal London Marketing Limited is authorised and regulated by the Financial Conduct Authority and introduces Royal London’s customers to other insurance companies. The firm is on the Financial Services Register, registration number 302391.


Royal London Corporate Pension Services Limited is authorised and regulated by the Financial Conduct Authority and provides pension services. The firm is on the Financial Services Register, registration number 460304.


October 2014 - 2TPR0951

scottish life we’re going through chaenges… for professional advisers only

Documents

a25 slide

ae schemes adviser charging

llp workers

better workplace pensions

normal client agreement

pensions regulator

automatic enrolment

workplace pensions market