External Digital Printing and Scanning Services Contract
It is important to have access to a local service that can scan/copy these large volumes at short notice and return them to TPR quickly and accurately in an appropriate format. Read more…
Security Screening Software
The Pensions Regulator is aiming to issue a tender on 04 March 2013 for the provision of pre-employment security screening in line with HMG Baseline Personnel Security Standard (BPSS). Read more…
Despite every person in the UK workfoprce being affected, many are still in the dark about auto-enrolment
It’s the biggest shake-up of pensions for a generation, and will result in millions of workers being pushed into saving money for their retirement for the first time, but many are still in the dark about auto-enrolment. Here we outline the how, when and where …
Why is it coming in?
We are all living longer and are likely to spend more than 20 years in retirement, but we’re not saving enough, the government says. Automatic enrolment is seen as the best way to overcome people’s “savings inertia”. As the Department for Work and Pensions (DWP) puts it: “Rather than taking action to save, an employee has to take action not to save.”
Who is affected?
Everyone in work aged between 22 and state pension age who earns more than £8,105 a year (this amount will be reviewed each year), and who isn’t already in a workplace pension scheme.
What about other people?
Workers who aren’t in that group can opt in, if they wish to. If you’re at least 16 but under 75, earn more than £5,564 a year and ask to be enrolled your company will have to put you in the scheme and pay a minimum contribution, too.
Companies will also need to enrol any workers aged 16-74 who earn less than that, and who ask to be put into the scheme, but they don’t need to pay contributions for them.
How much gets paid in?
The total minimum contribution will start at 2% of a worker’s gross earnings (of which at least 1% must be paid in by the employer). By October 2018 this minimum will have risen to 8%, made up of at least 3% from the company, up to 4% from the employee, and 1% tax relief.
These percentages don’t apply to all of an individual’s salary, but only to what they earn over a minimum (currently £5,564) up to a maximum limit (currently £42,475).
Does everyone join on 1 October?
No. All existing employers, including in some cases private individuals who employ a nanny or gardener, must have enrolled their employees by April 2017, but the roll-out is being staggered.
The scheme begins on 1 October for the biggest companies: those with more than 120,000 staff. They are followed by those employing between 50,000 and 119,999, who will go on 1 November. A full timetable of dates is on the Pensions Regulator’s website.
What if I don’t want to join?
Workers are free to opt out if they want to. The government hopes that forcing employers to contribute plus adding tax relief will encourage people to stay, but it has estimated that several million people may opt out. Some will take the view that they can’t afford it, while others will want to make their own arrangements.
What if my employer tries to encourage me to opt out?
Employers are prohibited from offering incentives or perks to encourage staff to opt out. This applies to both existing workers and new recruits and means that, for example, making a job offer or higher salary conditional on not joining the employer’s auto-enrolment scheme, is not allowed.
What happens if a company refuses to enrol its workers into a scheme?
Employers who don’t comply with the rules face a range of potential sanctions. Those who ignore the Pensions Regulator’s first request could get a fixed penalty of £400. Employers who “willfully and persistently” fail to comply face tougher penalties: £50 a day fines for those with fewer than five staff, rising to £500 a day for those with five to 49 staff, and an impressive £10,000 a day for those with more than 500 workers.
Should I stay in, or opt out?
One problem for some people could be the way auto-enrolment interacts with means-tested benefits. Almost a quarter of those automatically enrolled will be in their 20s, and one pensions expert told us that if he was 25, he probably wouldn’t be too concerned, because the benefits landscape will probably be very different by the time he retires. But, he said, if he was a 62-year-old being pushed into a pension scheme, “I would almost certainly opt out.”
How do I opt out?
You will have one month to complete an “opt out notice” and submit it to your employer. Any contributions already made will be returned.
Where can I get more information?
In our auto-enrolment section. In a downloadable booklet from the DWP (pdf). Also Nest – the organisation running the scheme that many employers will enrol workers into – has information for employees. It also has a calculator you can use to see how much you might get back (you will need to know how much your employer is contributing to use it).
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Daily Mirror publisher expected to come under scrutiny after declaring £55m rise in scheme’s funding deficit
Trinity Mirror is under fire for using its pension fund to pay off US creditors.
The publisher of the Daily Mirror, People and more than 100 regional titles said it had been forced to strike deals for a new finance facility and with its pension trustees to give it sufficient financial flexibility for the forseeable future.
The company denied any wrongdoing after it suspended £70m of payments to its final salary scheme over the next three years. In a surprising move, chief executive Sly Bailey said £10m a year would be transferred into the fund until 2015, before reverting back to normal annual payments of £33m. But the publisher, which reported a 40% fall in pre-tax profits to £74m, is expected to come under scrutiny from the Pensions Regulator after declaring a £55m rise in the scheme’s funding deficit to £172.6m at 31 December.
The company, which is not paying a dividend, blamed the falling stock market and lower discount rates for its pension deficit ballooning.
Finance director Vijay Vaghela said the deficit was measured at a specific point in time and was £30m lower at the end of February 2012.
The publisher also struck a new £110m bank facility, which will reduce to £94m when it expires in 2015. “The new bank facility and reduced pension contributions ensure that the group has sufficient financial flexibility for the foreseeable future,” the company said.
Trinity Mirror said the new financing facilities would ensure it was able to make £168m in payments of US loan notes due in stages from June 2012 to June 2014.
Trinity Mirror said that the profit slump reflected factors including reduced operating profit, foreign currency borrowing and increased interest-related costs relating to its pension scheme.
On an adjusted basis, stripping out such factors to look at the underlying performance of the business, Trinity Mirror reported that pre-tax profits fell by 15.4% from £108.6m in 2010 to £91.9m last year.
This is in line with city expectations. Adjusted operating profits slumped by 15% to £104.5m.
Bailey said that the company made £25m in savings and would have increased adjusted operating profits year-on-year if not for a £22m rise in newsprint prices.
Although Trinity Mirror remained significantly profitable in 2011, it is worth noting that the declines are effectively much deeper as the results are flattered by a full 52 weeks of operating profits and revenues from GMG Regional Media.
GMG Regional Media – the regional newspaper operation it acquired from Guardian Media Group, which owns MediaGuardian.co.uk, part-way through 2010 – only contributed 40 weeks worth of profit and revenue to Trinity Mirror in 2010.
Total revenues for Trinity Mirror fell by 2% to £746m.
This has led analysts at Citi to conclude that no dividend will be paid until after 2014, following the conclusion of the reduced pension payment deal with trustees.
The publisher also announced that it is to launch a daily deals service nationwide, called Happli, that it will back with £10m investment over the next two years.
The publisher forecasts that the business, which will be rolled out to 25 cities by the end of the year and 50 by early 2014, will make net revenues of about £20m by 2014.
The company reduced net debt by £44.7m to £221.2m in 2011.
“Our resilient cash flows, improving financial position and secure longer term financing underpin the value proposition of the business,” said Bailey.
The pensions watchdog said that it would scrutinise any reduction in contributions at Trinity Mirror “or other actions that increase risks to the scheme”, hinting that it had not been informed of the move before its announcement. A spokesman said the regulator was “prepared to take strong action where necessary”.
Ros Altmann, a pensions expert and director-general of the over-50s organisation Saga, said the company’s decision was unusual and could undermine the security of the fund in the short term, although the difficult economic conditions would mean many businesses were likely to be in a similar position over the next year.
John Ralfe, an independent pensions consultant, said it was believed to be the first instance of an employer reneging on commitments to its pension fund in favour of a debt refinancing deal.
He said the regulator would need to ask tough questions of the pension trustees, who agreed to a request from the publisher’s board to sanction the move. “This action underlines the weakness of current pension regulation. What is the Pensions Regulator doing to make sure this does not create a dangerous precedent for other companies to push their pension scheme behind other creditors?”
Trinity Mirror has come under pressure to renegotiate its debt agreements following a 90% fall in its value to £80m. A downturn in advertising and a decline in sales have hit the company’s sales and profits.
The pension scheme, which has liabilities of £1.7bn, had a shortfall of £230m at its last formal valuation.
Employers must make commitments to the regulator to fill the shortfalls in their funds, usually within a 10-year timescale.
The watchdog has a duty to maintain high funding levels among the UK’s 7,000 final salary schemes to prevent them creating a black hole in the government’s pension lifeboat scheme, the Pension Protection Fund, should the employer go bust.
The pension scheme is a sensitive issue among workers because former owner of the old Mirror Group, Robert Maxwell, notoriously took money from its scheme to bail out the company.
Since the Maxwell scandal, reforms of the pension system have pushed defined benefit pensions up the pecking order of creditors when a company is liquidated.
Insurance Brokerage Services for Pensions Regulator
The Pensiosn Regulator is looking to procure brokerage services for its various Insurance needs. Read more…