A QWPS could be A Stakeholder Pension An Occupational Pension Trust - - PowerPoint PPT Presentation

A QWPS could be…

• A Stakeholder Pension
• An Occupational Pension Trust
• A M aster Trust, multiple employers
• A Group of Personal Pension Plans
• National Employment Savings Trust(NEST)
• LGPS

Stakeholder Pension

• Annual M anagement Charge maximum 1.5%pa of the fund value for

10 years

• 1% per annum thereafter
• M inimum contribution: £20 as a one off or regular payment
• Typically a Personal Pension Plan though not necessarily
• Until Auto Enrolment all employers with 5 employees were required

to offer access to a ShP

• Employers were not required to make a contribution
• Only suitable for AE if fund charges are reduced to 0.75% pa

Occupational Pension

• Employer establishes, or participates in, a trust
• Employer typically pays all admin charges
• Employees must not pay more than 0.75%pa
• Strict governance, regulated by the Pensions Regulator
• Generally found in larger employers, often used to replace closed

Final Salary pensions

M aster Trust

• An Occupational Pension Scheme
• M ultiple employers participate by Deed of Adherence
• Centralised administration, law firms often provide independent

trustee services

• M ay be an employer admin charge
• Employees must not pay more than 0.75% pa FM C.
• Widely used for AE and growing rapidly
• Salvus, NOW:Pensions & the Peoples Pension are M aster Trusts

A Group of Personal Pensions

• Charges must be capped at 0.75%pa FM C
• Existing schemes may continue with current members
• Certain contracts need to be in place between the provider and

employer

• Employer needs to Self Certify suitability for AE
• Pension Providers have cherry picked employers
• If you do not fit the profile* you may be turned away

* Higher salaries, lower average age, stable workforce, single payroll, monthly paid

NEST National Employment Savings Trust

• Statutory requirement to accept all employers on their Staging Date
• Purpose built for AE to Government specification with government

loans

• Expected/ intended to cater for masses of smaller organisations
• M ay be tax benefits to non taxpayers earning c. £10,000pa
• Comprehensive governance in place
• Investment portfolios designed to protect funds at retirement
• Low FM C of 0.3%pa but 1.8% deducted from each contribution…

… .

• …

… ..until government loan is repaid.

LGPS

• Auto Enrolment Qualifying Scheme
• Some Councils will have current & past members
• Does not support the phasing of contributions from 2% to 8%
• Employees pay 5 - 6%, Employer average 14%, many much higher
• Unlimited liability for the employer, whatever it costs
• M ay already have past service debt to pay in addition
• CARE, a fraction of each years pay revalued to Pension Age
• No longer a final Salary based pension

United by differences

• Personal Pension contributions on actual pay, incl. SSP

, SM P , SSP

• Occupational Pensions on Pensionable Salary for employer, actual pay

for employees

• Trusts deduct contributions from gross pay, tax relief only if tax paid
• PPs & NEST deduct net from net pay so 20% tax credit regardless
• Some provide software to assist, some charge for this
• Some have an admin charge, particularly if low contributions
• Do not exit LGPS without understanding the financial implications

Useful contacts

• www.thepensionsregulator.gov.uk
• www.nestpensions.org.uk
• www.gov.uk/ workplace-pensions

GOV.UK

• www.hampshirealc.org.uk
• www.pensionsadvisoryservice.org.uk (for members)
• www.enrolmystaff.co.uk