Workplace pensions and your role as employersECC Breakfast Connections

Stephen Ingledew

Managing Director, Corporate

25 April 2012

Why are workplace pensions on the agenda?

• Number of pensioners will rise by half a million in 20 years

• Pension saving amongst employees is at an all time low

• Life expectancy is increasing rapidly

Source – Annual Survey of Hours and Earnings (ASHE) 2011

Source: Standard Life 2011 report ‘Keep on nudging’

However, workplace pensions are under-utilised…

• Over 1 million employers don’t have a workplace pension scheme

• Up to 10 million people are not saving into any pension scheme

• 35% of private sector employees are currently saving into a pension

• Many people on average salaries will retire with low incomes

Government reform of workplace pensions will mean…

• Auto-enrolment of employees

• Employers must put in place a qualifying workplace pension scheme

• Legal obligation to join eligible employees and re-enrol every three years

• Ongoing governance and compliance requirement

• Minimum contributions will be 8% of band earnings (3% from employer)

Research suggests this could work well…

33%would pay more

82%remain enrolled

Source: Standard Life 2011 report ‘Keep on nudging’

So what does this mean for employers…

Source: Department of work and pensions

>5000 4000-4999 500-3999 250- 50-249 <50

Q4 2012 Q1-Q2 2013 Q3-Q4 2013 Q1 2014Q2 2014- Q2 2015

Q3 2015 -

Contribution rates:

•2012-2017 = 1% employer and 1% employee

•2017-2018 = 2% employer and 3% employee

•2018 onward = 3% employer and 5% employee

Auto-enrolment start dates

Who’s here to help…

•DWP

•The Pensions Regulator

•Pension providers

•NEST

•Advisers

Technology will ease the burden…

The questions you need to consider…

When is your auto-enrolment date?

Does your current scheme qualify?

Do changes need to be made to payroll?

Are there trustees you need to consult with?

How many people will become eligible, and at what cost?

How are you going to communicate with your employees?

How will your employees respond…

Questions

©2012 Standard Life (images reproduced under licence)

Standard Life Assurance Limited registered in Scotland (SC286833) at Standard Life House, 30 Lothian Road, Edinburgh EH1 2DH.

Standard Life Assurance Limited is authorised and regulated by the Financial Services Authority.

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