A M A S T E R T R U S T S O L U T I O N F O R Y O U R
C L I E N T S A U T O E N R O L M E N T N E E D S
I N T R O D U C E R S G U I D E
F O R P R O F E S S I O N A L A D V I S O R S
In 2012 new regulations came into force whereby every UK employer now has to pay into a pension scheme for their staff. This new regime is called Auto Enrolment (AE) and whether your client is a large or small employer they will have to comply.
This brochure is designed to set out the reasons for change, what they have to do to comply with the new regulations and most importantly how to plan effectively. They will also need to keep a close eye on cost, changes to their payroll process and their internal administration procedures. The Pensions Regulator (tPR) are responsible for policing employers to ensure compliance. Therefore it is vital that your clients are ready and have access to an affordable solution.
A B O U T S A LV U S
SALVUS has been designed by Goddard Perry assisted by specialist third-party administrators HS Admin and pension law specialists Blake Lapthorn Pension Trustees Limited.
SALVUS is an occupational scheme known as a master trust which allows non-associated employers to join. SALVUS is simple and the only requirement is for your clients to “adhere” to our Trust. We will set up a “sub trust” specifically for your clients which establishes their scheme and allows their employees to join and pay regular monthly contributions.
Your clients may have an existing occupational Defined Benefit scheme (DB), a Defined Contribution scheme (DC), a Group Personal Pension or a Group Stakeholder scheme. Due to the special nature of master trusts, SALVUS may be the ideal product for them to meet their AE needs.
SALVUS is very straightforward with simplified administration for joiners and cost effective for your clients, with the provision for refund of contributions paid in the early years. The refund option is invaluable for employers especially those with a high turnover of staff. Refunds are not available from Group Personal Pensions, Group Stakeholder Schemes or the Government scheme the National Employment Savings Trust (NEST).
The essence of SALVUS is to reduce your clients administration when adding new members and to provide members with easy access to information to help them save. SALVUS has been designed to help your clients achieve your goals and provide their members with a competitive scheme.
Your clients will also have to start thinking about their HR systems, payroll systems and also any flexible benefit platforms they may currently operate.
I N T R O D U C T I O N
T I M E L I N E F O R Y O U R C L I E N T S
The Pensions Regulator has published a 7 step checklist for employers to help them plan ahead and comply with AE. Before embarking on their journey to AE they will need to know their staging date. Their compliance date (known as a staging date) can be calculated using the following scale:
S TA G I N G D AT E S
E M P L OY E R (by PAYE scheme or other description) Automatic Enrolment staging date*
1250 -1999 1 Sept 2013
800 - 1249 1 Oct 2013
500 -799 1 Nov 2013
350 - 499 1 Jan 2014
250 - 349 1 Feb 2014
Below 250 Contact SALVUS enquiries team
* To clarify your clients staging date please log on to the Pension Regulator website and enter their PAYE code. Their staging date will be determined by the number of staff they had in April 2012.
O B T A I N I N G “ Q W P S ” F O R Y O U R C L I E N T S ?
T H E I R E X I S T I N G S C H E M EAs the employer they will need to establish a QWPS (Qualifying Workplace Pension Scheme) and this can be their current scheme they offer, the Government backed National Employment Savings Trust (NEST) or a new scheme via a specialist provider (SALVUS) or insurer. C O N T R I B U T I O N L E V E L S The minimum required entry level of contribution is 1% of Qualifying Earnings from both employer and employee. These contributions will rise to a total of 8% by 2018 into their QWPS so planning ahead will be vital in your recommendation.
W H AT I S N E S T ?
• Government scheme with limited investment choices
• 0.3% annual management charge
• 1.8% contribution charge (£98.20 invested per £100 of contribution)
• No refunds of contribution (fund value) for short service
• No transfer in or out option • Annuity is the only retirement option
W H AT I S S A LV U S ?
• A centralised master trust scheme with a wide range of investment choices • Competitive annual management charge • Annual management charge equivalent to
0.75% or below
• Refunds of contribution for short service (less than 24 months)
• Full transfer in and out option (no penalty on transfer out)
Whether they choose their own scheme or SALVUS they will have to self-certify that their scheme and the contribution basis meets the required standard under the Pension Act 2008.
N E S T v s S A L V U S
C H A R G E S
NEST SALVUS
1.8% contribution charge. Only 98.2% of
contributions are invested *Annual Management Charge (AMC) of between 0.15% - 0.75% or an Annual Management Charge of 0.6% + £1 per month per member
Annual Management Charge (AMC) of 0.3%
F U N D C H O I C E
NEST SALVUS
Fund selection available covering low to
moderate risk Range of investment funds available including active, passive & lifestyle funds. Existing investments/platform could be considered and assigned to SALVUS
T R A N S F E R S I N A N D O U T
NEST SALVUS
Not allowed under current rules Allowed with no penalty on transfer out
A D M I N I S T R AT I O N A N D S U P P O RT
NEST SALVUS
Policy and fund administration outsourced Administered by HS Administrative Services Ltd
May require changes to employers’ current
systems and processes May require changes to employers’ current systems and processes
C O N T R I B U T I O N L I M I T S
NEST SALVUS
Restricted contribution level
(maximum £4,400 per year) No restriction on contribution levels. Overall annual allowance is £40,000 per tax year.
S P E C I A L I S T E X P E R I E N C E
NEST SALVUS
New Scheme New scheme but with over 10 years master
trust experience
R E F U N D S F O R S H O RT S E R V I C E E M P L O Y E E S * *
NEST SALVUS
Not available Available (small charge could apply) * Each scheme will be priced individually - please contact our enquiries team for a quotation.
C H A R G E S
NEST SALVUS
1.8% contribution charge. Only 98.2% of
contributions are invested *Annual Management Charge (AMC) of between 0.15% - 0.75% or an Annual Management Charge of 0.6% + £1 per month per member
Annual Management Charge (AMC) of 0.3%
F U N D C H O I C E
NEST SALVUS
Fund selection available covering low to
moderate risk Range of investment funds available including active, passive & lifestyle funds. Existing investments/platform could be considered and assigned to SALVUS
T R A N S F E R S I N A N D O U T
NEST SALVUS
Not allowed under current rules Allowed with no penalty on transfer out
A D M I N I S T R AT I O N A N D S U P P O RT
NEST SALVUS
Policy and fund administration outsourced Administered by HS Administrative Services Ltd
May require changes to employers’ current
systems and processes May require changes to employers’ current systems and processes
C O N T R I B U T I O N L I M I T S
NEST SALVUS
Restricted contribution level
(maximum £4,400 per year) No restriction on contribution levels. Overall annual allowance is £40,000 per tax year.
S P E C I A L I S T E X P E R I E N C E
NEST SALVUS
New Scheme New scheme but with over 10 years master
trust experience
R E F U N D S F O R S H O RT S E R V I C E E M P L O Y E E S * *
NEST SALVUS
Not available Available (small charge could apply)
C H A R G E S
Annual Management Charge (active, passive and
cash funds) Between 0.15% - 0.75% per annum
Administration charge £0-£1 per member per month
Processing of short service refunds £0 -£50 per member + Vat (deducted from the employers fund)
I N V E S T M E N T S
Lifestyle strategies Available
Investment options 10+ Aegon Scottish Equitable investment options plus 15+ guest funds (extra charge would apply) Nature of options Active, Passive or Cash - in specie available for £20M and above Investment platform Aegon open architecture or your clients current
investment provider/platform
Online access Yes
Switching Free switching
Lifestyling A default lifestyle is offered utilising Aquila BlackRock funds with a 15 year glide path
Prices Quoted daily
M E M B E R B E N E F I T S
Pension commencement lump sum calculation basis A maximum of 25% will be payable.
C O M M U N I C AT I O N S
Communications (including web site) can be tailored/
branded to company requirements Communications can be tailored/branded on request for larger cases Real time fund values accessible on-line Available via HS Admin
Risk Modellers assisting investment selection Available via HS Admin Statutory Money Purchase Illustrations Issued annually by HS Admin
A D M I N I S T R AT I O N
Administrators HS Admin
Administrator established 1985
Staff 60+
Pension contribution frequency Monthly
G O V E R N A N C E
Investment Consultant & Adviser Goddard Perry Consulting
FCA Approval number 125376
PI cover £1.8 Million (Liberty Mutual)
T R U S T E E S H I P
Trustee Wragge Lawrence Graham & Co
Pension Trustees Ltd.
Ownership Wholly owned subsidiary of Wragge LG
SALVUS is a regular premium occupational pension master trust designed to provide a QWPS as an alternative to NEST.
B A C K G R O U N D
SALVUS has been established to help your clients provide a simple quality pension scheme that meets all the requirements for AE, whilst at the same time providing flexibility and choices for their staff. SALVUS is a direct alternative to NEST.
When employers reach their “staging date” (based on the number of staff they employ) they will have to automatically enrol staff into a pension scheme with an entry contribution of at least a 1% employer and 1% employee (this will increase to total contributions of 8% by 2018).
SALVUS accepts regular employer and
employee contributions, and provides a range of pension investment funds to choose from. As a master trust, SALVUS takes advantage of Occupational Pension Scheme rules which not only allows for easy access for new members but also provides a cancellation option for short serving employees. This gives your client and its short service employees the opportunity to take a refund of contributions (fund value) for employees who complete less than 24 months service in their scheme (it should be noted that the government are reviewing this option and it may be reduced to 12 months or withdrawn in the future).
For many employers the refund option will be very attractive particularly as employer refunds are not available via Stakeholder, Group Personal Pension or NEST.
If you would like further information on AE and an analysis of your clients’ current scheme provision then please contact us.
The flowchart left outlines the basic application process once you have selected your QWPS. Or alternatively you can register and apply for Salvus at www.salvustrust.com. The default annual management charge will be 0.6% per annum plus £1 per month per member, regardless of the number of members your clients have.
H O W T O A P P LY ?
D O YO U P ROV I D E
M I D D L E WA R E ?
Many of our introducers can provide a “middleware” solution for their clients. However if required, Goddard Perry can provide you with a full middleware platform solution. This would be provided within our annual management charge. This service is provided via one of our group partners Strait Logics Ltd. Please contact our enquiries team for more information.
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COMMUNICATE THE CHANGES TO ALL STAFF
STAFF LETTERS, EMAILS, WEB, FAQs
3
CONTACT GODDARD PERRY (GPC)FOR SALVUS QUOTATION
NEST
PROVIDE DATA AND AGREE PROCEDURES TO NEST
FINISH
IDENTIFY ALL STAFF MEMBERS AFFECTED BY AE REVIEW YOUR EXISTING PLAN
SELECT APPROPRIATE QUALIFYING WORKPLACE PENSION SCHEME (QWPS) FROM: UNDERTAKE FULL AUTO ENROLMENT (AE) IMPACT ASSESSMENT
3
1
2
EXISTING PENSION SCHEME THE PENSION MASTER TRUST NEST
PROVIDE DATA AND AGREE PROCEDURES WITH CURRENT
PENSION PROVIDER
PROVIDE DATA AND AGREE PROCEDURES WITH HS ADMIN
PROVIDE DATA AND AGREE PROCEDURES TO NEST
FINISH HS ADMIN PREPARE DEED OF
ADHERENCEFOR SIGNATURE BY YOUR COMPANY
FINISH
1
PROVIDE GPC WITH SALARY, MEMBER DATA, CONTRIBUTION LEVELS
AND ANY POTENTIAL DC TRANSFERS
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GPC PROVIDE SCHEME PRICE QUOTATION
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SUBMIT SALVUS EMPLOYER APPLICATION TO GPC
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GPC PROVIDE DEED OF ADHERANCE TO BE SIGNED AND RETURNED BY YOUR CLIENT
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PROVIDE FORMAL DATA AND AGREE PROCEDURES/START DATE WITH HS ADMIN
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SCHEME STARTS
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CONTACT GODDARD PERRY (GPC) FOR SALVUS QUOTATION
1
PROVIDE GPC WITH SALARY, MEMBER DATA, CONTRIBUTION LEVELS
AND ANY POTENTIAL DC TRANSFERS
2
GPC PROVIDE SCHEME PRICE QUOTATION
3
SUBMIT SALVUS EMPLOYER APPLICATION TO GPC
4
GPC PROVIDE DEED OF ADHERANCE TO BE SIGNED AND RETURNED BY YOU
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PROVIDE FORMAL DATA AND AGREE PROCEDURES/START DATE WITH HS ADMIN
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SCHEME STARTS7
UN DER TAKE FU LL A UTO EN RO LM EN T (A E) IM PAC T A SSES SMEN T UN DER TAKE FULL AUTO ENRO LMEN T (A E) IMPA CT A SSES SMEN T UN DER TAKE FULL AUTO ENRO LMEN T (A E) IMPA CT A SSES SMEN TS C H E M E Q U O TAT I O N S & F U R T H E R
I N F O R M AT I O N ?
If you would like a formal quotation or further information on SALVUS please contact our enquiries team at:
C O N TA C T U S N O W F O R F U RT H E R I N F O R M AT I O N
SALVUS trust 020 8603 3700 salvus@goddardperry.com
Goddard Perry Consulting 020 8603 3700 salvus@goddardperry.com Wragge Lawrence Graham & Co Pension Trustees Ltd 0207 759 6541 enquiries@wragge-law.com
HS Admin 0151 448 5550 salvus@hsadmin.com
O R V I S I T W W W. S A LV U S T R U S T. C O . U K
H S A D M I N 25 GOODLASS ROAD SPEKE, LIVERPOOL L24 9HJ T. 0151 448 5400 F. 0151 448 5577 G O D D A R D P E R RY CORINTHIAN HOUSE 17 LANSDOWNE ROAD CROYDON, SURREY CR0 2BX T. 020 8603 3700 F. 020 8649 8831 E salvus@hsadmin.com. salvus@goddardperry.com www.salvustrust.com
T H R O U G H P R E P A R A T I O N C O M E S S T R E N G T H
A B O U T H S A D M I NHS Admin were established in 1985 and employ over 65 staff in their Liverpool head office. They administer over 30 final salar y and money purchase schemes with pension scheme assets totalling £2.75 Billion. They also administer the Spinnaker Master Trust which currently has £25 Million in assets (PPF & FAS - DC pots).
G O D D A R D P E R RY
Goddard Perr y were established in 1982 and have over 400 corporate clients. They are a growing employee benefit consultancy and have built up considerable experience in master trusts working with the Pension Protection Fund (PPF) and Financial Assistance Scheme (FAS) on their Spinnaker Master Trust.
A E G O N
Aegon are a global group with over n404 Billion under management worldwide and were originally established in 1832. Their head office is based in Edinburgh and they employ over 3000 staff.
HS Admin and Goddard Perr y are authorised and regulated by the Financial Conduct Authority
