Management Information Sheet
Workplace Pensions - Auto Enrolment
There are changes to the provision of workplace pensions as a result of the Pensions Act 2008 that will have implications for all employers and employees.
One result of this piece of legislation is that all employers will have to automatically enrol employees who meet minimum age and earnings criteria into an appropriate occupational pension scheme. The intention behind the legislation is to encourage people to better prepare for their retirement by making adequate pension provision.
For school based employees, the Teachers Pension Scheme and the Local Government Pension Scheme are both being amended to make them compliant with the requirements of the legislation and employees will continue to be enrolled in these schemes. Employees will still be able to opt out of the pension scheme but a major change is that this can only be done after they have been auto enrolled, and not before as they can do now.
It will be necessary to revise some business processes and update the Oracle payroll system in order to enable the County Council to meet its obligations under the new regulations, but there should be no additional administrative burden for schools. Schools do need to be aware that staffing costs may increase if employees who are not currently contributing to a pension scheme subsequently become members.
Timescale
Automatic enrolment is being introduced nationally from 1 October 2012, however the effective date of these changes for each employer is determined by the number of employees on their main PAYE return, the larger the number the earlier the implementation date, or staging date as it is known. The staging date for Norfolk County Council is 1 February 2013.
As the County Council is the employer for Community and Voluntary Controlled schools, the staging date for these schools will also be 1 February 2013.
Foundation and Voluntary Aided schools that use the County Council’s payroll service are included in the main County Council PAYE return and so will also have the same staging date of 1 February 2013.
Academies using the County Council’s payroll service, each have their own PAYE return as independent employers, and will have their own staging date according to the number of employees. Schools converting to academy status prior to 1 February 2013, will each eventually get their own staging date.
Implementation
Although the effective date of change for Norfolk County Council is 1 February 2013, the legislation does allow an option to defer automatic enrolment for the majority of existing staff until 2017. The authority has decided to exercise this option as employees would have had the opportunity to join either the Teachers Pension Scheme or the Local Government Pension Scheme as part of their conditions of employment.
However, it will not be possible to defer auto enrolment for new employees, or for existing employees whose earnings or age means that they would be covered by the auto enrolment regulations for the first time.
As part of the implementation process it will be necessary to write to all employees alerting them to the change and how it impacts them. They will be given details of how to find out more about pension provision and how to join a scheme if they are not currently a member. This will happen early in 2013.
Schools PeopleNet is currently being reviewed and will be updated so that employees can access the latest pension information and find answers to frequently asked questions.
Once further information is available schools will be contacted again with an update and with information to share with staff.
Please note that the auto enrolment legislation is separate to other reforms to public sector pensions that are due in 2014 and 2015.
In the meantime more information about auto enrolment is available on the Pensions Regulator website
One result of this piece of legislation is that all employers will have to automatically enrol employees who meet minimum age and earnings criteria into an appropriate occupational pension scheme. The intention behind the legislation is to encourage people to better prepare for their retirement by making adequate pension provision.
For school based employees, the Teachers Pension Scheme and the Local Government Pension Scheme are both being amended to make them compliant with the requirements of the legislation and employees will continue to be enrolled in these schemes. Employees will still be able to opt out of the pension scheme but a major change is that this can only be done after they have been auto enrolled, and not before as they can do now.
It will be necessary to revise some business processes and update the Oracle payroll system in order to enable the County Council to meet its obligations under the new regulations, but there should be no additional administrative burden for schools. Schools do need to be aware that staffing costs may increase if employees who are not currently contributing to a pension scheme subsequently become members.
Timescale
Automatic enrolment is being introduced nationally from 1 October 2012, however the effective date of these changes for each employer is determined by the number of employees on their main PAYE return, the larger the number the earlier the implementation date, or staging date as it is known. The staging date for Norfolk County Council is 1 February 2013.
As the County Council is the employer for Community and Voluntary Controlled schools, the staging date for these schools will also be 1 February 2013.
Foundation and Voluntary Aided schools that use the County Council’s payroll service are included in the main County Council PAYE return and so will also have the same staging date of 1 February 2013.
Academies using the County Council’s payroll service, each have their own PAYE return as independent employers, and will have their own staging date according to the number of employees. Schools converting to academy status prior to 1 February 2013, will each eventually get their own staging date.
Implementation
Although the effective date of change for Norfolk County Council is 1 February 2013, the legislation does allow an option to defer automatic enrolment for the majority of existing staff until 2017. The authority has decided to exercise this option as employees would have had the opportunity to join either the Teachers Pension Scheme or the Local Government Pension Scheme as part of their conditions of employment.
However, it will not be possible to defer auto enrolment for new employees, or for existing employees whose earnings or age means that they would be covered by the auto enrolment regulations for the first time.
As part of the implementation process it will be necessary to write to all employees alerting them to the change and how it impacts them. They will be given details of how to find out more about pension provision and how to join a scheme if they are not currently a member. This will happen early in 2013.
Schools PeopleNet is currently being reviewed and will be updated so that employees can access the latest pension information and find answers to frequently asked questions.
Once further information is available schools will be contacted again with an update and with information to share with staff.
Please note that the auto enrolment legislation is separate to other reforms to public sector pensions that are due in 2014 and 2015.
In the meantime more information about auto enrolment is available on the Pensions Regulator website