24th Annual Payroll Conference 2008 by yangxichun


									CPD Workshop 2011

3 February 2011

Lindsay Melvin
Lindsay Melvin

•   Maths Graduate – Bristol Uni
•   Chartered Accountant
•   Member of the CIOT
•   National winner for essay on strategy
•   Finance director for USM quoted company
•   Chair of a Group of Subsidiary Companies
Lindsay Melvin

• CEO of engineering group
• Operations Director of CIPP
• Foundation degree in payroll management
• London marathon runner
CIPP’s Mission Statement

        “Leading payroll and pension
       professionals through education,
         membership and recognition”
What has the CIPP achieved in last 12
•   Chartered status
•   Development of Pensions FD
•   Investment in e-learning
•   Progression in PQP and training
•   Financial stability
•   Growth of strategic partnerships
Our immediate strategies

 • To strive for excellence in all departments
 • To be proactive with our members and
   potential members both in the UK and
 • To continue with our growth in all areas
Our longer term strategies

• To live and breathe our mission statement
• To increase both the payroll and pensions profile
  in the UK and internationally
• To strive for excellence in all we do
• To be proactive
What learning outcomes do we want from
What I would like you to do

• Work in pairs and:
• On yellow post its note down (one item per post
  it) what particular technical learning outcome(s)
  you would to achieve
• On……post its note down the soft skills
  outcome(s) you would like to achieve

• During the day please note down any actions
  which you plan to implement when you get back
  into your office
• At the end of the day can you please fill out a
  course evaluation form
• Thanks!
How can I bring more added value to
my job?

Steve Poole
Worcester College of Technology
Stages of awareness during development
Analysing competence
 Two areas that you need to consider:
 • Job related needs – what knowledge
   and skills do you possess at the
   moment, and what do you need in
   order to progress?
 • Learning needs – how are you most
   likely to acquire the knowledge and
   skills you need?
   As individuals please complete the Personal
   Competence questionnaire.

   In groups compare your answers and identify
   common themes, write these themes on your
   flip chart paper.
Personal Competence Areas
 •   Acting assertively
 •   Acting strategically
 •   Behaving ethically
 •   Building teams
 •   Communicating
 •   Focusing on results
 •   Influencing others
 •   Managing self
 •   Searching for information
 •   Thinking and taking decisions

Recommence: 11:15
 CPD Legislation Update 1

CIPP Policy & Research
Karen Thomson FCIPP MSc

   •   Rates & Allowances
   •   Attachment of Earnings
   •   Citizen News
   •   Expenses & Benefits

  •   Expenses & Benefits
  •   National Insurance
  •   PAYE
  •   Statutory Payments

 • Employment Law
 • Miscellaneous
Rates & Allowances
Rates & Allowances
Small Employers Compensation Rate

  • From April 2011
     • Reduced from 4.5% to 3%
     • 92% for all other employers remains
Rates & Allowances
Statutory Payments
                          2011 per week

Statutory Adoption Pay
Earnings Threshold        £102
Standard Rate             £128.73
Statutory Maternity Pay
Earnings Threshold        £102
Standard Rate             £128.73
Statutory Paternity Pay
Earnings Threshold        £102
Standard Rate             £128.73
Statutory Sick Pay
Earnings Threshold        £102
Standard Rate             £81.60
Rates & Allowances
Redundancy Rates

       • 1 February 2011

         – £400 per week
         – Daily Guarantee Payment £22.20
Rates & Allowances
Advisory Fuel Rates

  AFRs for company car drivers from 1 December 2010

 Engine size         Petrol     Diesel    LPG

 1400cc or less         13p        12p        9p

 1401cc to 2000cc       15p        12p       10p

 Over 2000cc            21p        15p       15p
Rates & Allowances
Jurors Allowances (Scotland) January 2011
 Financial loss allowance – first 5   £32.37
 days of service – up to 4 hours
 Financial loss allowance – first 5   £64.95
 days of service– more than 4 hours
 Financial loss allowance– 6th to     £129.91
 100th day of service
 Financial loss allowance – 101st     £230
 day of service onwards
 Adult dependent carer allowance      £6 per hour
Rates and Allowances
Pensions Tax Relief

 • 2011/12 - AA for tax privileged pension saving
   reduced from £255,000 to £50,000

 • 2012/13 - LTA to be reduced from £1.8m to £1.5m
Attachment of Earnings
Attachment of Earnings

• Changes to Court Order regulations likely
• Consultation February 2011
• Policy team will update after meeting
Expenses and Benefits
Expenses and Benefits
Company Car changes

• 2011-2012
  – No reduction for alternative fuels
  – Diesel surcharge to apply to all vehicles
  – 9% for wholly electric cars, but temporary 0%
    continues until 2014-15
  – £80k cap abolished
  – Lower threshold reduces from 130 to 125 g/km
  – Letters will only be E, D & A
 Expenses and Benefits

• HMRC still consulting with stakeholders
• PAYE proposal discussion document
   – Asked a question in respect of P11Ds
   – CIPP members continue to support “payrolling”
   – When Real-Time Information is introduced makes
     sense to payroll BIKs
Expenses and Benefits
Salary Sacrifice

• Childcare Voucher Scheme to change 6 April
   – Basic Rate tax relief only
   – FAQs published October
Expenses and Benefits
Salary Sacrifice

• Childcare Voucher Scheme
  – Employees in scheme prior to 6 April 2011
  – New scheme from 6 April 2011 for new
    entrants or new schemes
Expenses and Benefits
Salary Sacrifice
          Basic Rate   Higher Rate   Additional Rate

Weekly    £55          £28           £22

Monthly   £243         £124          £97

Annual    £2915        £1484         £1166
Expenses and Benefits
Salary Sacrifice

• Childcare Voucher New Scheme
   – 6 April earnings assessment to be carried out, includes BIKs
   – Records to be kept for compliance purposes
   – Personal Allowance acceptable to use code as at 6 April
   – Assessment valid for 12 months
   – Error use P11D
Expenses and Benefits
Salary Sacrifice

• Cycle to work scheme
   – HMRC confirms no exemption where legislation
     prevents employees from joining scheme – therefore
     not deemed “available to all”
   – Revised guidance published
   – Valuation Matrix published
Expenses and Benefits
Cycle to work matrix
Age of Cycle       Acceptable disposal value %

                   Original price of cycle less than   Original Price £500+
1 Year             18%                                 25%

18 months          16%                                 21%

2 years            13%                                 17%

3 years            8%                                  12%

4 years            3%                                  7%

5 years            Negligible                          2%

6 years and over   Negligible                          Negligible
Expenses and Benefits
Salary Sacrifice

• Workplace Canteens
   – From 6 April 2011 legislation has been introduced to
     restrict the exemption for the benefit of free or
     subsidised meals where an employee has an
     entitlement in conjunction with salary sacrifice or
     flexible benefits arrangements to employer-provided
     free or subsidised meals
Expenses and Benefits
Salary Sacrifice

• VAT on Retail Vouchers
  – Astra Zeneca UK v HMRC case
  – ECJ rules in favour of HMRC
  – Guidance expected
Expenses & Benefits
P46 (Car)

 • April 2011
    – HMRC to permit replacement car forms where sent
PAYE Review
• PAYE Review
  – Real Time Information to proceed
  – 2012 start of implementation
  – Consultation closes 28 February
  – More workshops to go ahead with CIPP and
  – More on this in the next update
Scottish Income Tax
• Serving Scotland Better Calman Report
  – SVR to be replaced with new Scottish Rate of
    Income Tax
  – Scottish taxpayers rate to reduce by 10p in
    the pound
  – Government committed to devolution of
    Scottish Income Tax
  – Scotland bill introduced November 2010
Student Taxation Browne Report

     • Discusses student funding and repayment of
       Student Loans
     • Graduate tax not to go ahead
     • New proposal “Student Finance Plan”
        – Students pay nothing up front
        – Earnings threshold £21,000 per year
        – 9% of any income above £21,000
        – If earnings drop, then payments drop,
          known as a payment holiday
     • Response to the review due
Online Filing

 • Extra Statutory Concession B46 ceases on
   31 March 2011
    – No grace for late returns
Statutory Payments
Statutory Payments
Additional Statutory Paternity Pay

– April 2011
– Regulations approved by Parliament 18 March
– Statutory Paternity Pay to be renamed Ordinary
  Statutory Paternity Pay (OSPP)
– Guidance published
– No changes to PAYE forms in 2010/11
– Payroll software specification now available
Statutory Payments
Additional Statutory Paternity Pay

– Applies to babies due on or after 3 April 2011
– The rate of ASPP will be the lower of 90% of average weekly
  earnings or the standard weekly rate.
– ASPP will be available only if the employee’s partner (the
  mother or adopter) was entitled to SMP (or Maternity
  Allowance (MA)) or SAP and has returned to work before the
  end of the SMP, MA or SAP pay period.
– The employee will be able to work for up to ten days during
  the ASPP without losing the right to APP for the APP-weeks
  in which he or she worked.
Statutory Payments
Additional Statutory Paternity Pay

– Only one period of leave and pay will be available regardless
  of the number of children born or adopted.
– The earliest point that APP and leave could be taken is when
  the child is 20 weeks old (or, in the case of adoption, 20
  weeks since the date of placement);
– APP must cease by the child’s first birthday (or in the case of
  adoption, within twelve months of the date of placement).
Statutory Payments
Additional Statutory Paternity Pay

• Guidance located on HMRC web pages and Business
   – Covers early birth and death of mother
   – For guidance visit HMRC home/employer
     column/statutory payments
Statutory Payments
Additional Statutory Paternity Pay

• Employers can ask to see proof of birth
   – E.g. Birth Certificate
   – Legislation will not permit withholding of
Statutory Payments
Additional Statutory Paternity Pay

•   Self Cert means dates may not align
•   Could be a gap between transfer of payment
•   ASPP to be paid within 39 SMP pay period
•   Only last week of ASPP can be a part week payment
Statutory Payments
Additional Statutory Paternity Pay

• No changes to SMP as a result of introduction of
  ASPP and leave
• SMP pay period continues for woman even if returned
  to work
   – If woman goes sick within 39 weeks SMP
     pay period SMP due not SSP
Statutory Payments
Additional Statutory Paternity Pay

 • Revised HMRC Booklet E19
 • Forms
    • SC3 becoming a parent
    • SC4 becoming an adoptive
    • SC5 Ordinary Statutory
      Paternity Pay and
      ordinary paternity leave when
      from abroad
Statutory Payments
Additional Statutory Paternity Pay
Forms cont’d:
   • SC7 Additional Statutory Paternity Pay/
       ‾ additional paternity leave – becoming
       ‾ a parent
   • SC8 Additional Statutory Paternity Pay/additional
     paternity leave – becoming an adoptive parent
   • SC9 Additional Statutory Paternity Pay/additional
     paternity leave – adopting a child from abroad
Statutory Payments
Additional Statutory Paternity Pay

• Finally:
       • SC10 Additional Statutory Paternity
         Pay/additional paternity leave -
         death of the mother/adopter
Statutory Payments
Statutory Adoption Pay E16

• From April 2011 only available online
   – Least used statutory payments booklet
   – All others still available online and in paper
   – More booklets to go online in the future
Employment Law News
Employment Law
unfair dismissal
• Government is considering increasing length of
  service before employee can claim unfair
   – Likely to be increased from 1yr to 2yrs
Employment Law
Holiday pay and PHI payments

• Souter v Royal College of Nursing (Scotland)
   – Employment tribunal refused claim for backdated holiday pay
     whilst receiving PHI payments
Employment Law
Agency Workers

   • EU Directive for equal treatment
   • Temporary staff will have equal rights after 12
   • Government confirmation regulations go live
     October 2011
   • Further guidance expected
Employment Law
Flexible Working

• BIS announcement:
  – Right to request flexible Working
     • Extended to children under 18
     • Expected April 2012
Employment Law
Right to request time off for training

• 6 April 2010 phased in with completion in 2011
   – Employers to consider request
   – Follows same model as flexible working requests
   – Government reviewing August 2010
HMRC consultation on record checks

   • Programme expected for SMEs
      – Checking adequacy and accuracy
      – Consultation on how this might work
HMRC Centralising PAYE

   • HMRC have begun work to centralise certain
     operational work to Newcastle
      – Expected to create significant savings
      – To be completed March 2011
VAT on promotional samples

   • EMI v HMRC
      – ECJ ruled no VAT on promotional samples
EEA NI Agreement

   • E101 certificate
      – No longer via “Do it online”
      – Apply using secure registration
      – Effective 11 November 2010

           • Karen Thomson

           • Diana Bruce
Legislative Update
Thank You

CIPP Policy & Research
Karen Thomson FCIPP MSc

Recommence: 13:00
Continuing Professional Development
3 February 2011

HMRC Update
Phil Nilson
Business Customer Unit

•   National Insurance and PAYE Service (NPS) Update
•   Improving the Operation of PAYE
•   Communications with employers
•   End of Tax Year 2010-2011
•   Changes from 6 April 2011
•   National Minimum Wage
•   Plastic National Insurance Number cards
NPS Update

• Annual Coding

• End of Year Reconciliation

• Data Quality
  – http://www.hmrc.gov.uk/ebu/paye_techpack/business-rules.pdf
NPS – Help and support
      Help for taxpayers can be found at:



                0845 3000 627
Contacting HMRC
•   There is now just one number for employees to ring for help with tax

         – 0845 300 0627

•   And only one for employers:

         – 0845 7 143 143

•   And we have made changes to our Contact Centre opening hours:

         – No Sunday opening

         – Monday – Friday: 8am to 8pm

         – Saturday: 8am to 4pm
Improving the Operation of PAYE
Improving the operation of PAYE

•   ‘Discussion document’ issued 27 July 2010
•   Consultation document issued 3 December 2010:
    ‘Improving the operation of PAYE: Collecting Real
    Time Information’
•   Closing date for comments 28 February 2011. Send to:
        – paye.consultation@hmrc.gsi.gov.uk
        – HM Revenue and Customs, PAYE
          Consultation, 100 Parliament Street,
          London SW1A 2BQ
        – Telephone 020 7147 0842
What’s in the consultation document?

•   PAYE Today and RTI in outline
•   Responses to the Discussion Paper
•   Real Time Information: detail
•   Channel choice
•   Scenarios – what will happen in practice
•   Timetable for implementation
•   Real Time Information items for employers
        – currently 102
Communications with employers
Communications with employers
•   You will no longer receive any Employer Packs

•   These have been replaced by online guidance and downloadable
    applications. Go to:

          – www.businesslink.gov.uk/employerpackandbulletins

•   To ensure you don’t miss anything, register for ‘e-mail alerts’; go to:

          – www.businesslink.gov.uk/hmrcemployeremailalerts

•   See also, informal HMRC ‘Weekly Updates’. Click on ‘What’s new for
    PAYE’ at www.businesslink.gov.uk/paye
Registering for e-mail alerts

You will need:

•   Employer PAYE reference

•   Employer name

•   An e-mail address

•   Phone number and contact name

    NB: This is not the same as registering for HMRC’s Online Services
Basic PAYE tools
•   Download from mid-February at
•   Tools include:
        – an employer database
        – a P11 Calculator, linked to P32
          Employment Payment Record
        – a range of other calculators
        – Interactive forms
        – a Learning Zone
Basic PAYE tools
•   If you used the Employer CD-ROM during 2010-2011, in
    order to successfully transfer data across to the new
    tools, you must download the latest update to the 2010
    CD-ROM. Go to:
        – www.hmrc.gov.uk/employers/cdrom

•   Technical specifications required to run the Basic PAYE
    Tools can be found in the Online Employer Bulletin due to
    be published on 14 February
End of Tax Year 2010-2011
End of Tax Year 2010-2011

•   Your Employer Annual Return – P35 and P14s – must reach HMRC
    by 19 May 2011

•   Extra Statutory Concession B46 comes to an end on 31 March

         – go to www.hmrc.gov.uk/briefs/company-tax/brief2410.htm

•   If no Return is required…

         – go to www.businesslink.gov.uk/noemployerreturn

•   If a Return is required…

         – go to www.hmrc.gov.uk/ebu/qual_stan.htm
The Employer Orderline and paper P14 forms

•   HMRC asks employers and agents to consider carefully their paper
    stationery ordering requirements

•   Online filing for virtually all employers means there is now no need to
    order paper P14s

•   Reduced P14 stationery was available for 2009-2010

•   For 2010-11 and beyond:

          – P14 will become a 2-part form

          – HMRC will hold only stocks of the manual completion 2-part
Electronic P60s

  • Employers to have the option to provide P60
    information in paper or electronic format
  • The change comes into effect for the tax year 2010-11
    onwards, meaning that the first P60 that can be
    provided electronically will be that for the year ending
    5 April 2011
  • The information recorded on form P60 is not changing
  • HMRC publication RD1 (Substitute forms P60) will be
Changes from 6 April 2011
Changes from 6 April 2011: Income Tax

               Income Tax Allowances

Personal Allowance for people aged under 65   £7,475

Personal Allowance for people aged 65-74      £9,940

Personal Allowance for people aged 75 and     £10,090
Married Couple’s Allowance aged 75 and over   £7,295
(born before 6 April 1935)
Changes from 6 April 2011: Income Tax

     Rate          %        Bandwidth

   Basic rate      20%      £1 - £35,000

  Higher rate      40%   £35,001 - £150,000

 Additional rate   50%   £150,001 and above
Changes from 6 April 2011: Income Tax

The headlines:
•   A general uplift of tax codes with suffix ‘L’
•   Code for emergency use will be 747L
•   Instructions for employers on form P9X(2011)
     – Go to
•   Individual tax codes issued between January and March
•   New tax code D1 introduced
Changes from 6 April 2011: NICs

            Lower     Secondary    Primary    Upper      Upper
           Earnings   Threshold   Threshold   Accrual   Earnings
            Limit                              Point     Limit

 Weekly     £102        £136        £139       £770      £817

2 weekly    £204        £272        £278      £1540      £1634

4 weekly    £408        £544        £556      £3080      £3268

Monthly     £442        £589        £602      £3337      £3540

 Annual     £5304      £7072       £7225      £40040    £42475
Changes from 6 April 2011: NICs rates

All contracted-out and Not contacted-out rates increase by 1%:

    – Employer, including:

             – Class 1A and Class 1B

    – Employee, including

             – Married Women’s/Widows’ Reduced Rate

             – Additional rate due above Upper Earnings Limit

      For more about tax and NI rates, thresholds and allowances, go to:


                             or see Helpbook E12
New coding changes from 6 April 2011

Scenario                             Current code           Code from 6

Employee does not provide a P45 or   BR, cumulative basis   0T
complete P46 on time

Payment made to an individual who    BR                     0T
has left

Paid employment continues after      New code on Week       0T
employee begins receiving            1/Month 1 basis
occupation pension payments
Paying tax at the 50% rate in 2010-2011

•   50% rate introduced from 6 April 2010 for taxpayers with
    taxable income of more than £150,000
•   Right amount of tax should be deducted if income is from
    one source only…
•   …but if from two or more sources, an underpayment is
    likely to arise
•   HMRC is writing to such taxpayers warning them of the
    potential underpayment; letter will be headed ‘Paying tax
    at the 50% rate in 2010-2011’
National Minimum Wage
National Minimum Wage

Changes effective from 1 January 2011:

•   payments to workers for travelling expenses (and associated
    expenses for subsistence and accommodation) reduce national
    minimum wage pay if they are paid for travel from home to a
    temporary workplace and are allowable for tax and National
    Insurance purposes

•   On 1 October 2010, BIS announced a scheme to name employers
    who deliberately flout NMW law. The scheme came into effect on 1
    January and employers who meet published criteria will be named by
    BIS in a press release
National Minimum Wage

Other news:

•   The National Minimum Wage (NMW) Annual Report is now available.
    It provides information about a range of NMW issues and gives
    details of the NMW compliance strategy. To view, go to

•   The Government is consulting on possible changes to the NMW rules
    on employer-provided accommodation in relation to students who
    work part-time for their educational institution. The consultation
    document was published in January. To view, go to
Plastic National Insurance number (NINo) cards

•   HMRC has ceased sending out replacement cards; a
    letter is sent instead
•   We expect to withdraw plastic cards around October
•   If an employee can’t produce a NINo, go to:
        – www.hmrc.gov.uk/forms/ca5403.pdf
        – www.hmrc.gov.uk/forms/ca6855.pdf
Any questions?
How good are you as a team player?

What is this question actually asking

Steve Poole
Worcester College of Technology
Personal Effectiveness

What are the areas of skill and competence that
you need to be able to demonstrate if you are to
be considered personally effective?
10 Competence areas
 •   Coping with stress
 •   Managing time
 •   Verbal communication & body language
 •   Assertiveness
 •   Negotiating
 •   Taking part/chairing meetings
 •   Effective presentations
 •   Problem solving
 •   Creativity
 •   Decision making
 How effectively we communicate determines
 how well we can:
 • Build relationships
 • Convey purpose and meaning
 • Motivate others
 • Coach, develop and support others
 • Gather and use information
 • Agree objectives and strategic direction
 • Solve problems
 • Manage changing situations
 • Provide effective customer service
Listening skills
 • Effective verbal communication is a two
   way process
 • Research suggests that we spend
   about 70% of our time listening
 • Implies that if you want to improve your
   communication skills the best place to
   start is with listening skills
Activity One

      Good and poor listening
When you were listened to you probably noticed
that the listener was:
• Using eye contact
• Nodding or showing in some other way that they
  were concentrating on what you said
• Asking relevant questions

This kind of behaviour characterises what is
called active listening.
Active listening enhances relationships
 The speaker will:
 • Feel understood
 • Be more likely to approach you a second time
 • Be more receptive to what you have to say
 You will:
 • Build a relationship that will support future
 • Be able to make informed decisions as a result
 • Be in a better position to help with queries or
Questioning skills
We all use questions everyday for:
• Gathering information
• Developing or testing understanding
• Stimulating reflective thought
• Applying information
• Helping to understand new concepts
• Developing and/or changing attitudes
• Assisting evaluation
• Focusing attention
4 Types of questions

             •   Open
             •   Closed
             •   Leading
             •   Probing

1.   Did you complete the report I asked you for?
2.   You will work overtime this evening, won’t you?
3.   What happened at the meeting?
4.   Would you like someone from the project team
     to help you?
Positive and negative language
 • Most people work more effectively in a
   positive and enthusiastic environment
 • Some words and phrases create a
   positive effect
 • Others create a negative effect
 • Use your judgement – you can promote
   supportive communications by being
   aware of the effect of what you say!
Body language
 Research has shown that in face to face
 conversation people communicate in the
 following way:
 • 50% by their body language
 • 40% by their tone of their voice
 • 10% by their verbal delivery
Body language is:

• How we combine expression, gesture and
• Eye contact
• Facial expression
• Use of hands
• General posture
• Organising the space
• Mirroring

In pairs identify how you would use your body
language to convey:
• Confidence
• Mistrust
• Liking
• Uncertainty

Be prepared to demonstrate!
• Listening and questioning skills are important
  elements of the communication process
• Active listening involves paying due attention to
  ensure that you understand what is being said
• Asking questions is part of active listening but also
  helps you gather information and confirm that you’ve
  got it right
• Body language may convey more than our actual
  words do
Introducing PebblePad

The Institutes CPD recording

Allan Isdale

• What is PebblePad

• Tour of PebblePad

• Q&A Session
Questions ?
Thank you


Recommence: 15:15
The Impact of Pensions
Reform on employers and
some important but little
known facts
Darren Laverty, Director, secondsight
Andy Agathangelou, Head of Business Development & Training, PTL
Areas covered

1. Auto-enrolment in plain

2. Understanding the
   National Employment
   Savings Trust (NEST)

3. How early decisions
   could save employers
   huge sums for many
Aims of Pensions Reform

              •   To increase the
                  retirement savings of the

              •   Aimed particularly at the
                  low paid who do not
                  save and small

              •   The hope is that many
                  continue to save and not
                  opt out
How could 2012 impact employers?

Auto-enrolment into ‘a’ pension

               Key principles:

               • New employees auto-enrolled after
                 3 months

               • All non-pension members enrolled

               • Employees must join and then can
                 then choose to opt out

               • Opt outs re-enrolled every 3 years
Employers must auto-enrol into a
‘Qualifying’ pension scheme

                  1. Use NEST

                  2. ‘Certify’ own existing
                     group pension
Intended contribution structure

               •   ‘Jobholder’- pays     5%
                   of ‘Qualifying Earnings’ and
                   Employer - pays        3%

               •   ‘Qualifying’ earnings = total
                   earnings in the band between
                   £5,715 and £38,185 (if earn
                   over £7,336)

               •   Total Earnings include basic
                   salary, commission, bonuses,
                   overtime and statutory
  Phasing in contributions

        Phasing to help
       employers with the
          extra cost
Original Phasing proposal
2012   Jobholder 1% Employer 1%

2013 Jobholder 3% Employer 2%

2014 Jobholder 5% Employer 3%
Staging of employers

System concerns if   7 million people join day

                 Staged over 36 months

                 Largest employers to go
 Staging by employee number
Employee No.       Staging date

120,000 or more    1 Oct 2012
50,000 - 119,999   1 Nov 2012
30,000 - 49,999    1 Jan 2013
20,000 - 29,999    1 Feb 2013
10,000 - 19,999    1 Mar 2013
6,000 - 9,999      1 April 2013
4,100 - 5,999      1 May 2013
4,000 - 4,099      1 June 2013
3,000 - 3,999      1 July 2013
2,000 - 2,999      1 Aug 2013
1,250 - 1,999      1 Sept 2013
800 - 1,249        1 Oct 2013
500 - 799          1 Nov 2013
350 - 499          1 Jan 2014
250 - 349          1 Feb 2014
240 - 249          1 April 2014
150 - 239          1 May 2014
90 - 149           1 June 2014
50 - 89            1 July 2014
Delayed phasing for early stagers
   2012   Jobholder 1%   Employer 1%
   2013   Jobholder 1%   Employer 1%
   2014   Jobholder 1%   Employer 1%
   2015   Jobholder 1%   Employer 1%
   2016 Jobholder 3% Employer 2%
   2017 Jobholder 5% Employer 3%
   How the numbers work…
                                           Max £3,600 pa


                            £20,000          £32,470
                            8% Total           8%
           0 contribution   Contribution       Total
£7,336                      £1142.80         Contribution
             £6,500                          £2,597.60
What if pensionable pay = basic pay?
Total Contribution as a % of Pay
 Simpler ‘Certification’ of existing contributions

                                              Total Pay

                                 Total Pay
                   Total Pay
Pensionable Pay
                                 If more       If less
                               than 85%      than 85%

                   7%            8%            9%

                  Option 1     Option 2      Option 3
Consequences of non-compliance

• It will be a criminal offence
  for employer not to:

   – set up in first place

   – auto-enrol

   – re-enrol every 3 years

   – make an inducement
Individuals not just employers

                    • Trustees or managers of
                      pension scheme
                    • Payroll administrators
                    • Accountants
                    • Scheme administrators


                     £400 Fixed penalty

                      Up to £10,000 per day
The ultimate penalty
Who will do NEST administration?

                  • Indian Group into:
                      – IT
                      – Communications
                      – Engineering
                      – Materials
                      – Services
                      – Energy
                      – Consumer products
                      – Chemicals

                  • Were they selected or last
                    man standing?

                  • Famous for the cheapest
                    new car in the world
Who will do NEST investment?

               • US Group

               • 440 Investment Professionals

               • 28 Worldwide locations

               • $1.9 Trillion under

       No transfers in or out
What are the proposed charges?

• Annual Management Charge

• Contribution charge 1.8%

• Aim to phase out contribution
  charge but no details of when

• Aim to recoup the est. £600m
  of running costs over 10 years
Other unresolved issues

• Transient, seasonal, part-time,
  students and temporary

• Affordability

• Under current rules many may
  simply fund their own ‘means
  tested’ Pension Credit
 What about the Return On Investment?

• Employees might think you
  are only paying into pension
  because you have to

• Employee appreciation
  could reduce

• ‘Certification’ because what
  you offer is better than
 How do we create and maintain
 a good ROI?
• Internal marketing

• Education

• Communication

• Individual advice

• Forecasting and

  Leads to higher employee appreciation of
Excellent comms and advice can be
       How are employers paying for it?

                         • Fees and retainers

                         • Fund based

                         • Factored fund based

                         • Combinations of the
The cost and demand for financial
advice will increase

                  • NEST will mean increased
                    administration for employers

                  • Higher numbers of employees
                    auto-enrolled will have
                    questions and ongoing

                  • Adviser numbers down after
    How the Retail Distribution Review
    (RDR) affects group pensions

•    Minimum                               No more factoring of AMC
     qualifications                             to cover cost of
     increased as of
                                           enrolment and advice out
     Jan 2013
                                                 from Jan 2013
•    Adviser numbers
     predicted to drop
     by 2/3rds      Shifting Sands Ernst

     and Young 09

•    Too old to make
How does factoring work?

        Year 1 (0.5% of £200pm) = £6

          •   Find out now how your
              current pension fits with
              the new rules

          •   Good comms and advice
              can enhance and
              maintain high ROI post
              pensions reform

          •   Early action could save
              employers huge sums
              for many years
    Who is Secondsight?

    The employee benefits division at

•      Nationwide coverage
•      Regulated by FSA
•      Over 100 independent
       financial advisers
•      Approx 100 employees
•      13 offices throughout the
Some existing secondsight clients
Recent Awards
Not satisfied but ‘delighted’ clients

• We have never
  been sacked

• If not delighted
  do not pay
    Thanks from Secondsight

•   This presentation is for information purposes only and does not constitute advice or a
    personalised recommendation

•   The value of investments can fall as well as rise

•   Past performance is not a reliable indicator of future results

•   This presentation is based on our understanding of current and proposed legislation,
    which may change

•   Tax reliefs are those that apply currently, the value of such reliefs will depend on the
    circumstances of the plan holder and may be subject to change in the future

•   What you get back at retirement cannot be guaranteed and will depend on how much
    you pay in, investment performance and interest rates when you retire

•   Secondsight is a trading style of Foster Denovo Limited
Do you know if you are doing a good

Lindsay Melvin
How do we define good job?

• Working in pairs, consider what good is in your
  own job and how this:
• Is currently measured
• How it should be measured
• What is hard to measure
How do we achieve top quality feedback and
• A robust role specification - role purpose, direct
  reports, key measurables, principal
  accountabilities, key knowledge and skills
• A sound understanding of the quantifiable
  activities - KPIs (Key Performance Indicators)
• Competencies (see next slide)

• A definition “skills knowledge and attributes”
• Or in other words:
• “behaviours which need to be demonstrated for
Do you know your KPIs and competencies?

• In pairs share your main KPIs and competencies
• If your JD or KPIs or competencies needs
  revisiting then please put this down as an action
  point to take back to your employer. Set yourself
  a time line as well!
Performance reviews

• Research has shown that performance
  decreases in over a third of cases following

• WHY? – brainstorm ideas

• The way the feedback is delivered
• There is no follow-up platform
How should feedback be delivered?

•   The room
•   Preparation on both sides
•   Should be no surprises
•   Agree agenda
•   Agree outcomes
•   No interruptions
•   50:50 approximate speaking split

• 121s
• Regular reviews during the year
• Training provided
360 degree appraisals
  • There are on line tools on the market which work
  • Off the shelf tools use well-defined competencies-
    fine for a first go but then probably need fine
  • The appraisee chooses several reviewers from
    each possible group - subordinates, peers, line
    manager, internal and external stakeholders, etc
  • The feedback is anonymous and confidential
360 degree appraisals

  • There is a self-appraisal as well
  • The tool then looks at areas in need of
    attention and devises a development
    programme in conjunction with a coach
  • CIPP have started using this approach
  • WCT have used the tool for some time
The Strategic aspect

   • What more added value can I give in my
     job?....over to Steve
What next? How do I put what I have
learnt and these tools into practice

Lindsay Melvin
Have we covered what we set out to do?

Further help:
• News on line/payroll professional
• Advisory line
• Training courses
• Qualifications
• Further CPD events
• CPD on line
First a little technical knowledge test

• Don’t worry we are not sharing this with your
• A pass will enable you to commence year 2 of
  our CIPP foundation degree!

Please take this opportunity to:
• Complete your action list with some timelines
• Please remember to complete your online
  feedback form
• Thanks!

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