Auto Enrolment

TRONC and Auto Enrolment

TRONC and Auto Enrolment

****New update after a meeting with the Pension Regulator*****

TAP Assist does a lot of work with Peninsula, the HR outsourcing company, who we support by talking about Auto Enrolment at their seminars that they run in various locations. This means we get to meet many different types of employers; one recently was a restaurant owner and they had a question about TRONC.

Now TRONC for anybody who does not know (this included myself until this week!) is “A TRONC is a special pay arrangement used to distribute tips, gratuities and service charges.” as stated on the HMRC website.

It basically allows an employer to collect the tips and probably more commonly things like service charges from card payments and distribute them to the staff. It goes on to say. “Commonly a TRONC is a central pool of funds in which some or all of the tips and service charges paid by customers are distributed to employees. How such arrangements work is entirely a matter for the business. How amounts paid from the TRONC are distributed is a matter for the TRONCmaster, TRONC committee (if one exists) and or TRONC members’’.

Now when it comes to Auto Enrolment, an employer needs to be able to assess an employee’s earnings, calculate contributions as a percentage of the employees “qualifying earnings”, contributions will then need to be deducted on a jobholder’s “qualifying earnings” between a band of £5,668 and £41,450 (2013/2014 figures). Qualifying earnings includes any of the following components of pay that are due to be paid to the worker:

Statutory sick pay
Statutory maternity pay
Ordinarily or additional statutory paternity pay
Statutory adoption pay

So does this include TRONC earnings?

I contacted the Pensions Regulator about the question we were asked. The […]

Contractual Enrolment v Auto Enrolment

Could Contractual Enrolment be used instead of Auto Enrolment?
We have been getting an increasing number of questions around the use of Contractual Enrolment and what impact it has on Auto Enrolment.

Firstly, what is Contractual Enrolment?

Well to be honest, it is basically how most pensions were done before Auto Enrolment. Using a GPP as an example, an employee, as part of the T&C’s in the employment contract, would be offered a pension. They would have to sign up to it, agree to have money taken out of their pay package etc. maybe even have contributions paid through Salary Exchange . In terms of the employer’s duties under the Pensions act 2008 legislation, contractual enrolment will tick a lot of boxes, some tangible to the legislation, some are ‘’nice to haves’’, but it does not take all the employers duties away.

I have tried to outline some areas and points around Contractual Enrolment below:

Benefit rather than compliance

Some employers do view Auto Enrolment as a tax, (well that’s because it is…!) but it could be turned on its head and used in a positive “I care about my employees” way. Using Contractual Enrolment to offer a pension to the workforce earlier than required could be advertised with a positive spin, rather than “we have been forced to give you this…” It really will depend on the employer’s opinion to the “tax” issue, but putting a positive spin on something that has to be done, can only be a good thing.

Requires workers consent

So Contractual Enrolment by default adds more work to the Enrolment process, one of the good things about Auto Enrolment (depending on whose point of view you are looking at it from!) is that the […]

Auto Enrolment News – 3 Things You Should Know From Last Week – ending 06.09.13

Last week’s Auto Enrolment News articles that caught our eye were:

DWP: ‘Less than 10%’ opting out of auto-enrolment

This continues the trend seen with some of the bigger employers, a figure much lower than originally forecast.  Will we see this kind of rate as we head towards the SME market?

With 90 per cent remaining in auto enrolment pension schemes, unprepared SMEs could be left with a nasty surprise if they don’t act soon…

And finally some examples here from a few Advisers explaining briefly how they charge for Auto Enrolment advice:

This is an area that is of great interest to us and we will shortly be launching an Adviser Workshop series of our own, outlining some simple tips and advice of how Advisers can charge for Auto Enrolment.  The workshops will also highlight where you can outsource certain aspects of the service to add value for themselves and their clients.

Auto Enrolment Capacity Crunch….Scottish Life Announcement

We mentioned in our previous post there has been widespread predictions of an impending auto enrolment capacity crunch.  Running the risk of saying we told you so……well you get the idea.

Scottish Life today became the first Provider to finally admit that there is indeed a ‘capacity crunch’ and they will turn away any businesses that are less than 6 months away from their staging date unless they adhere to very strict conditions.  This includes clients who already have a Scottish Life pension arrangement!  We are confident that they won’t be the first Provider to set these sorts of parameters and make these announcements.
So what does this mean for Advisers?  Well it illustrates the need for the following:

You should be speaking to your existing clients now!  Many auto enrolment solutions can be put in place straight away but not paid for until the staging date is reached – why wait?

We would suggest looking at independent solutions away from Providers to avoid the worst of the fallout but also to ensure complete impartiality and allow the employer full control over compliance and data

Be proactive in promoting your business as a place Employers can turn to for help.  There will be many Employers who have underestimated where they needed to be in order to be compliant.  You should be out there marketing your business to help these guys and grow your business!

If you know you should be doing all the above but are scratching your head and feeling overwhelmed then please get in touch.  Our services are perfectly aligned to help Adviser businesses and take the burden of Auto Enrolment off their shoulders.  It is now becoming apparent that the Providers will not be in a position to […]

The capacity crunch and auto-enrolment

Why independent solutions are needed in the market place.
This is an interesting article from that puts forward some valid points concerning the resources within the mainstream pensions industry and its ability to provide pensions and by default Auto Enrolment (AE) compliance solutions for employers. TAP Assist has long advocated that an adviser cannot justify making a pension recommendation based on the AE compliance solution that a pension company offers. An independent compliance solution that is not tied to a provider will allow the employer to have control of their compliance and data  regardless of the pension solution(s).

TAP Assist has been created to offer a comprehensive and flexible set of support services encompassing all areas of Sales, Marketing and Implementation which will allow the Adviser to concentrate on their core financial services and offer a fully independent solution to their clients.

We can also help you avoid the capacity crunch with our new AE Ready solution, please get in contact if need any help with Auto Enrolment.

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