Happy New Year!
2018 promises to be a very a busy year for our clients with major legislative changes impacting all of us in some shape or form.
Mifid II or to give its proper name Markets in Financial Instruments Directive was implemented in the UK on the 3rd of January 2018 in an attempt to provide greater transparency and protection for investors. This bit of legislation is not for the faint-hearted as it has taken something like 1.4 million paragraphs and around seven years to implement!
Although these new requirements will not be immediately apparent to individuals, they will change the way investments are actioned:
- A greater reporting transparency on charges
- The long-term goal of driving down costs
- Increasing investment returns for individual investors.
Re-enrolment – 2018 is also an important year for a very large percentage of our clients as they approach the three-year re-enrolment based on their original staging date. There is a regulatory requirement for all employers to re-enrol certain employees back into the automatic enrolment pension scheme every three years. It is also a regulatory requirement for employers to make another Declaration of Compliance once this duty has been completed.
Re-enrolment and re-declaration of compliance are legal duties, if employers do not act they could be fined! Needless to say, our support team will be in touch with clients approaching re-enrolment to provide practical help and guidance.
The Pension Regulator has produced a user-friendly guide with a complete explanation.
Changes in Contribution Rates
6th April 2018 is the date that all employers will need to apply new contribution rates for all automatic enrolment schemes from the current rate of 2% of qualifying earnings to 5% increasing again on the 6th April 2019 to 8% of qualifying earnings.
Some Key Points:
- All automatic enrolment pension schemes with contribution rates that would be below the minimum amount after the rate increases, must apply the higher rates in order to remain a qualifying scheme.
- If a pension scheme does not increase its minimum contribution levels in line with the legal requirements, it will no longer be a qualifying scheme for existing members and cannot be used for automatic enrolment.
- The employer and staff member can choose to pay more than the minimum contributions if they wish.
Our team will be in touch with all clients to offer further help and assistance in setting up your payroll system to implement these new arrangements. If you have any questions please do not hesitate to contact us.
2018 is also a big year for our Finance Director Wendy Woodward who is now officially “in training” for her cycle ride from Lands End to John O’Groats. She is cycling in support of Sarcoma Cancer following the loss of our shareholder and close personal friend Andy Radford to this dreadful disease last year. Wendy will set off on the 4th August 2018 a challenge which will take fourteen days and see her ride on average 70 miles per day. We all hope her preparation proceeds to plan and without injury as the big day approaches!
And finally – we would like to wish all our clients and supporters a Happy and Prosperous New Year!
From Russell, Wendy and all of us at AutoEnrollMe