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auto enrolment
and NEST
How NEST can help you meet your
new employer duties
Auto enrolment is the biggest change to
pensions provision in the UK for generations.
NEST is playing a key part in its success
by delivering a quality, low cost and
straightforward scheme for all of those
affected by auto enrolment.
Helen Dean
Chief executive, NEST Corporation
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Under the new pension rules, 1.8 million employers will NESTs scheme design is based on an in-depth
enrol 10 million eligible workers by 2018. Theyll have to understanding of the new duties and guidance from The
automatically enrol some and others will need to be Pensions Regulator (TPR) and the Department for Work
enrolled if they ask to join. This means that a new and Pensions (DWP). That means with NEST you can be
generation of savers will start putting money into a confident that youre using a high quality scheme that
Helen Dean pension for the first time. more than measures up to all the regulations and best
Chief executive practice guidelines.
It doesnt matter what size your organisation is. As an
NEST Corporation employer youll need to make sure youre ready to meet The very first step on your auto enrolment journey is to
your new duties. Youll need to tackle tasks like keepingknow when you need to be ready to comply with the
track of who needs to be automatically enrolled and new duties. This is called your staging date and will set
The governments auto making regular pension contributions. the timeline youll need to work towards. Next, youll
enrolment reforms have been NEST can help. Set up by government especially for auto
need to understand the new duties and how they apply
up and running since 2012. to your workers. Once youre armed with these facts,
enrolment, were here to make sure every employer,
youll be able to start making any changes to your
These changes mean that every large or small, has access to a workplace pension scheme
payroll and HR processes that may be needed to support
that meets the new pension rules. We understand what
employer in the UK, whatever you need to do to get ready and we provide a range of
a pension scheme.
its size, will need to provide a tools to make your job easier. Taking it one step at a time will make it easier to get
workplace pension scheme to ready. Have a look at the Getting started section of this
Our scheme has been independently recognised for
booklet on page 16 to find out more.
its workers. quality and innovation. Weve been awarded a Defaqto
5 Star Rating in the auto enrolment pension category We hope this guide provides a good starting point. You
and have been independently assessed and achieved can also find a range of useful information on our
Pension Quality Mark Ready status. Weve also won a website at nestpensions.org.uk to help you understand
number of industry awards. what you need to do and when.
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In this guide
Your new pension duties How NEST can help Clear communications
page 12
page 6 page 10
We communicate clearly with you and with our
This is a summary of what auto enrolment means for Built for auto enrolment members to support them as they save. This makes
you. We outline what you need to do and when, who page 10
using NEST easier for you as it means fewer questions
needs to be enrolled and how much you and your
NEST was created specifically for auto enrolment and to from workers and less time for you spent addressing
workers need to contribute.
make it easy for you to comply with your duties. Our their issues.
online tools, pre-set contribution levels and enrolment
types, and online member opt-outs make it easier for Award-winning investment approach
you to manage administration. page 12
Our NEST Retirement Date Funds have attracted awards
Online and easy to use for quality and innovation. Our investment approach is
page 10
designed to meet the needs of all your workers
NEST is easy to manage online whenever it suits you. throughout the time they save.
You can carry out almost all processes through your
online account including enrolling workers, setting up
contributions and making payments.
Great value
page 11
There are no charges for employers to set up and use
NEST. We also keep charges low for our members, which
means more of the contributions made by you and your
workers go to building their retirement pot.
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Its easy to get help with NEST Getting started - a quick guide Tools and letter templates
page 13
page 16 page 19
We understand that setting up and administering a Youre required by the new regulations to tell your
workplace pension can look like a lot of work. Thats why Putting a workplace pension scheme in place can look
workers how youre meeting your new duties and how it
weve made it easy and secure for you to let someone else like a big task. This guide breaks the task into
affects them. Weve put together a range of tools and
take day-to-day control of your account. It could be manageable steps and helps you understand what you
message templates to help.
someone inside your organisation acting as an individual need to do and when.
delegate, like someone from HR or payroll. It could also be
a third party, like a financial adviser, accountant or payroll Who runs NEST Corporation?
provider using NEST Connect, our online hub for page 18
delegated access.
NEST Corporation is the Trustee body that runs the
Ways to use NEST scheme. It has a Chair and up to 14 Trustee Members
page 14 who have a number of legal duties one of which is to
Any employer can use NEST to meet their new duties. act in the interests of scheme members.
Were flexible enough to work alongside another scheme
you already have in place or to be your only pension
scheme. You can use it for all your workers or just a
particular group.
Connecting your payroll to NEST web services
page 14
Our web services make it easy for you to transfer
information automatically to and from your payroll
software to NEST.
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01 Your new
pension duties
Wholl be enrolled? Age 22 to State Pension age Age 16-22 or State Pension age - 75
You need to automatically enrol and make contributions
for anyone who:
isnt already an active member of a qualifying scheme
Eligible jobholder Non-eligible jobholder
works or usually works in the UK Earnings from 10,000 Earnings between 5,876
and 10,000
earns more than 10,000 a year
is at least 22 years old but under State Pension age.
These are known as eligible jobholders.
Non-eligible jobholders Workers without
The auto enrolment earnings trigger of 10,000 applies Earnings between 5,876 qualifying earnings
to the 2017/18 tax year and is reviewed every year by and 10,000 Earnings up to 5,876
the government.
Youll also need to enrol the following workers if they ask
you to:
non-eligible jobholders Workers without
qualifying earnings
workers without qualifying earnings, also known Earnings up to 5,876
as entitled workers.
Youll need to make contributions for non-eligible
jobholders as well and you can choose to make
contributions for workers without qualifying earnings,
but you dont have to.
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Contributions
Letting your workers know whats happening Opting out The new duties mean youll need to make a minimum
level of contributions on behalf of many of your workers.
You have a legal responsibility to let your workers know Eligible jobholders and non-eligible jobholders can opt out
how the reforms affect them, even if theyre not eligible within one month of their enrolment. If they opt out youll The legal minimum contribution for all jobholders is
for auto enrolment. That means telling them: need to refund any contributions theyve made and treat currently 2 per cent of their qualifying earnings. Of this,
them as if they were never enrolled. Workers can choose to you need to pay at least 1 per cent. You can pay more if
whether theyre being automatically enrolled or have
stop contributions after the opt-out period. They may be you want to.
the right to opt in
entitled to a refund depending on the rules of the scheme
Qualifying earnings is a band of gross annual earnings
whether theyre entitled to contributions from you youre using. Check with your scheme to see how its rules
on which you can calculate contributions for auto
and how much theyll need to contribute around opting out might affect your workers.
enrolment. This is between 5,876 and 45,000 a year
about the scheme youve chosen NEST makes opting out straightforward for you and your for the 2017/18 tax year. The figures will be reviewed
workers. Workers can opt out online or by telephone. every year by the government. Qualifying earnings
when theyll be affected.
Workers can also ask to opt out by giving you a paper form. include a workers salary, wages, overtime, bonuses and
NEST has created a range of letter templates to help you Youll need to tell us about it if they do. This is usually taken commission, as well as statutory sick pay, maternity,
get the right information to your workers. You can find care of through the system youll use to make your regular paternity and adoption pay.
out more about them on page 19. contributions to NEST.
Minimum contributions are increasing gradually over the
You may be able to hold on to contributions during the next few years. By April 2019, subject to parliamentary
opt-out period rather than sending them on. This makes it approval, the combined minimum contribution rate for
quicker and easier to make refunds if necessary but it could qualifying earnings will have gone up to 8 per cent of
make your payroll process more complicated. which you must pay 3 per cent.
Your new pension duties 9
6%
definition you use. These alternative methods are
4 per cent sometimes referred to as certification because you
5%
0.6 per cent worker normally need to fill out a certificate if youre not using
tax relief
qualifying earnings to calculate contributions.
4%
At NEST, we allow you to use a definition of earnings
2.4 per cent that suits your organisation. You can select qualifying
3% worker earnings or one of the other pre-set alternatives from
our system. You can even use your own earnings basis,
as long as it satisfies the regulatory minimum.
2%
0.2 per cent tax relief
0.8 per cent 3 per cent
worker employer
1% 2 per cent
employer
1 per cent
employer
0%
Oct 2012 Oct 2017* Oct 2018 onwards*
*The dates for the increases to 5 per cent and 8 per cent are due to
change to April 2018 and April 2019, subject to parliamentary approval.
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02 How NEST
can help
We dont just comply with the regulations, weve taken Want to get started now? Take a look at Getting started
the time to understand the new duties and best on page 16.
practice guidance from The Pensions Regulator (TPR) Remember - auto enrolment isnt a one-off activity.
and the Department for Work and Pensions (DWP). After youve enrolled your workers and started sending
NEST incorporates the standards set by the contributions over to NEST, there are still things youll
government for what a high- quality pension scheme need to do on a regular basis to make sure youre
should look like. meeting your duties.
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03 Getting started
- a quick guide
At least 6 months before 3 months before your
your staging date staging date
Check TPRs website and read Read our website section Format your worker Split your workers into different
their guidance on your duties. What employers need to do. data correctly. categories and enrolment types.
Speak to your payroll provider. Decide if you want to use a Communicate early with your Send statutory
Getting ready to enrol workers may mean making Speak to your pension provider waiting period (postponement) workers to let them know communications to
significant changes to your systems and processes. It for any or all of your workers. about changes. your workers.
where you have an existing
can take a large organisation around 12 months to get arrangement. Set out your timelines. Set up your online account
with NEST, or delegate access
ready for their employer duties. For smaller Consider asking for advice and Decide contributions.
to let someone do it for you.
services from external providers.
organisations, its a good idea to start thinking through Choose how youll
Download our worker
Build auto enrolment costs into manage NEST.
your key decisions as early as possible. your financial model.
communication templates.
Ongoing administration
There are certain things youll need
to do to make sure youre meeting
your duties.
Auto enrolment and NEST
administration will need to be a For more information on getting started visit:
part of your day-to-day processes. nestpensions.org.uk/getreadyforautoenrolment
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