Will automatic enrolment affect you?
If you ordinarily work in the UK, then it is likely to affect you.
Everyone in the UK who receives payments for work from the RNLI that are assessed for tax and/or National Insurance deductions has to be assessed for automatic enrolment. This assessment will apply to you whether or not you are already a member of the RNLI Group Personal Pension Plan (‘the Pension Plan’).
If you are based in the Republic of Ireland, the Channel Islands or the Isle of Man, this is unlikely to affect you as this new legislation only applies to those who work or ordinarily work in the United Kingdom. It may affect you if you are on secondment in any of these locations but ordinarily work in the UK.
SAR Ltd employees will not be assessed for automatic enrolment until at least 2015. Further information will be provided to SAR Ltd employees closer to the time of their automatic enrolment. However, SAR employees can still join or continue to be a member of their stakeholder pension scheme.
The criteria
You will be automatically enrolled into the Pension Plan at the minimum contribution level if you:
- are not already a member of a workplace pension scheme that meets the government’s new standards, (the Pension Plan does meet these standards)
- are at least 22 years old and are below state pension age
- earn £9,440* a year or more; and
- work or ordinarily work in the UK.
*The earnings threshold will be reviewed by the UK Government each April.
Don’t meet the criteria, but still want a pension?
If you do not qualify to be automatically enrolled, you may still have the right to join the Pension Plan. Depending on the assessment of age and earnings, everyone aged 16-74 in the UK will come under one of three Groups in the 2013/14 tax year:
| Earning up to £5668 (approx £473 a month) | Earning between £5669 and £9439 (approx £474 to £786 a month) | Earning above £9440 (approx £787 a month) | |
|---|---|---|---|
| Aged 16 to 21 | Group 3 | Group 2 | Group 2 |
| Aged 22 to SPA (State pension age) | Group 3 | Group 2 | Group 1 |
| Aged SPA to 74 | Group 3 | Group 2 | Group 2 |
The following table explains how each group will be treated:
| Group 1 Eligible jobholders |
The RNLI has to automatically enrol all ‘eligible jobholders’ into the Pension Plan, in the month that their age/earnings are assessed – if they meet the thresholds that month. The RNLI’s UK pensions provider, Friends Life will notify each person when they have been assessed and will confirm details of the one calendar month opt out window. No paperwork is completed by the employee – joining the pension plan is automatic. |
|---|---|
| Group 2 Non-eligible jobholders |
Anyone assessed as a ‘non eligible jobholder’ will be notified by Friends Life that they have the right to opt in to the Pension Plan. Friends Life will provide a link to the form that each person needs to complete and return to Friends Life, if they want to opt in to the Pension Plan. Friends Life will notify each person that opts in details of the one calendar month opt out window. |
| Group 3 Entitled workers |
Anyone assessed as an ‘entitled worker’ will be notified by Friends Life that they have the right to join the Pension Plan. Friends Life will provide a link to the form that employees need to complete and return to Friends Life, if they want to join the Pension Plan. |
What will I need to do?
You do not need to do anything until Friends Life, the RNLI’s UK pension provider, confirms the outcome of your assessment. They will then advise you on the next steps.
When is it happening?
The RNLI is required to be ready to automatically enrol all eligible workers from 1 September 2013. Friends Life will email or write to everyone to tell them when they will be assessed. The assessment for seasonal workers will take place on 1 December which means the majority won’t be assessed until the 2014 season.
How will Friends Life contact me?
As a Charity, the RNLI wants to administer automatic enrolment in the most cost effective way possible. Therefore, the RNLI has asked Friends Life to use the following forms of communication:
- Your RNLI email address, if you have one
- Your personal email address, if you are a seasonal employee
- Your home address if you do not have an RNLI email address and if you are not a seasonal employee
It is essential that you keep People_Admin@rnli.org.uk informed if you change your address and if you are a seasonal employee, your personal email address needs to be updated if you change this too. Email changes to: People_Admin@rnli.org.uk
What if I don’t want to become a member of the Pension Plan?
You cannot opt out before you are automatically enrolled. However, once you have been automatically enrolled or join the the Pension Plan, Friends Life, the RNLI’s UK pension provider, will write to you to confirm the outcome of your assessment for automatic enrolment, and they will also give you details of how you can opt out.
If you opt out or cease contributions, your age and earnings will continue to be regularly assessed. If you reach a new age or earnings trigger, Friends Life will notify you and you will either be automatically enrolled or given the opportunity to join the Pension Plan.
If you don’t reach an age or earnings trigger, your age and earnings will be re-assessed every three years, at the anniversary of the RNLI’s automatic enrolment start date.
Seasonal employees’ age/earnings will be assessed every season.
How much will it cost me?
This depends which group you fall into:
| Earning up to £5,668 (approx £473 a month) | Earning between £5,669 and £9,439 (approx £474 to £786 a month) | Earning above £9,440 (approx £787 a month) | |
|---|---|---|---|
| Aged 16 to 21 | Group 3 | Group 2 | Group 2 |
| Aged 22 to SPA (State pension age) | Group 3 | Group 2 | Group 1 |
| Aged SPA to 74 | Group 3 | Group 2 | Group 2 |
If you are in group 1:
You will initially contribute 1% of your basic pay. The RNLI will also contribute the equivalent of 1% of your basic pay.
Once you have been enrolled or joined the Pension Plan, you can select to pay a higher contribution if you wish, and depending on the level of contribution you choose, you may receive a higher RNLI contribution too. Salaried employees will be able to use Salary Exchange to save some National Insurance each month. The RNLI People Admin team will send you more information about how to increase your contribution levels the month after you join the Pension Plan.
The minimum automatic enrolment contributions payable into the Pension Plan are being phased in and are due to increase from October 2017 as follows:
- From 1 October 2017 to 30 September 2018: 2% employee and 3% RNLI contribution
- From 1 October 2018 onwards: 2% employee and 6% RNLI contribution
Calculator
Use our Contributory Pension calculator to work out the total value of contributions into your pension from you and the RNLI:
http://www.rnlipensions.org.uk/uk-gppp/calculators/
If you are in groups 2 or 3:
You will not be automatically enrolled, but can still choose to join the Pension Plan and you will be able to receive a contribution from the RNLI. The cost to you will depend on how much you decide to contribute. Friends Life will let you know how you can join the Plan. Use our pension calculator to work out the total value of contributions into your pension from you and the RNLI:
http://www.rnlipensions.org.uk/uk-gppp/calculators/
Am I entitled to life cover?
All active staff/employed lifeboat crew pension members will receive 2 × their salary ‘life cover’ if they remain on the minimum contribution level. However they will have the option to receive 8 × salary life cover if they wish to increase pension contributions to the normal contribution levels in month two onwards of their pension membership:
| Staff/employee contribution levels |
Full time crew contribution levels |
Life cover level | |||
|---|---|---|---|---|---|
| Employee % | Employer % | Employee % | Employer % | ||
| Auto enrolment minimum contribution levels | 1% | 1% | 1% | 1% | 2 × salary |
| Normal contribution levels | 3 | 11 | 5 | 14 | 8 × salary |
| 4 | 12 | 6 | 16 | 8 × salary | |
| 5 | 13 | 7 | 18 | 8 × salary | |
| 6 | 14 | 8 | 20 | 8 × salary | |
| 7 | 15 | 9 | 22 | 8 × salary | |
| 8 | 16 | 10 | 24 | 8 × salary | |
Moving to monthly pay
From 1 December 2013 all seasonal staff will move from weekly to monthly pay.
The introduction of RTI (Real Time Information) from the HMRC, which means the RNLI has to run more checks each time payroll is run or face financial penalties, as well as the complexities involved with running assessments for automatic enrolment each time payroll is run, means that it is no longer practical to continue a weekly payroll for any staff.
Lifeguards working in December 2013 will be paid for the week commencing 25 November 2013 on 6 December. All timesheets received after that and before the first monthly cut off date of 16 December will be paid in the monthly payroll on 23 December.
The majority of seasonal employees leave the RNLI before 1 December and therefore will not be affected by the change until 2014. The People Department will confirm the change to monthly pay in the conditional offer letters issued in September 2013.
For more information about the move to monthly pay, have a look at the automatic enrolment FAQ for seasonal workers.
Are you from outside the UK?
When you leave the RNLI or retire, you can transfer the benefit to an approved arrangement in your home country, subject to approval of the UK tax office (called Her Majesty’s Revenue & Customs – known as HMRC). This transfer can take place at the point at which you leave the RNLI or at a later date (as long as it is at least one year prior to retirement).
Alternatively, you can leave the accrued pension fund in the UK and receive the benefit at retirement, either into a UK or overseas bank account as required. However it should be noted that this method could have ramifications from a taxation position dependent upon the tax agreements in place between the UK and the employee’s home country. These options are also available to any UK resident employees that choose to retire to an overseas location.
Returning to work for the RNLI
Each year that you return to the RNLI you will be reassessed for automatic enrolment.
The RNLI is required by law to do this.
If you joined the Pension Plan in the previous year, you can continue to add to the same pension pot when you return – unless you transferred your pension to another pension scheme in the meantime.
Making payments to your pension between seasons
The Pension Plan is your own accumulated fund. When you leave the RNLI, if you work or ordinarily work in the UK, you will be able to ‘activate’ your Pension Plan via Friends Life and pay in your own contributions even when you are not working for the RNLI.
What can I do with my pension when I leave the RNLI?
You can either:
- make your own contributions to your pension fund
- leave it invested with Friends Life
- or you can transfer it to another, recognised pension scheme.
Further information on your options when you leave the RNLI will be captured in a letter sent to all seasonal pension members, at the end of each season, from 2014 onwards.