Below you will find some Frequently Asked Questions about Automatic Enrolment.
A qualifying pensionscheme under legislation means our Scheme must be a workplace pension scheme, be tax registered, meet certain minimum standards and we, the employer, must make contributions into it on behalf of an eligible employee.
Our qualifying pension scheme is the KPS-MP.
For some time now, the Government has been worried that many of us in the UK aren’t properly prepared for retirement and won’t have enough money to live on when we come to retire. So to help us, everyone in the UK who meets the eligibility criteria will be automatically enrolled into a pension scheme through work. This is called ‘Automatic Enrolment’.
For more information see the Knowledge Centre.
Yes, all new employees (full-time, part-time or temporary employees) will be assessed within their second month of service and their eligibility will be based on the automatic enrolment criteria. This will then determine whether they will be automatically enrolled.
For more information see the Knowledge Centre.
Earnings under the legislation takes into account everything that you are paid, including your basic salary, commission, overtime, allowances that you receive, including regional allowances and car allowances. It also includes bonuses.
Once you have successfully been automatically enrolled you will make a minimum 3% contribution based on a new legal minimum which is called “basic pay”. Your employer will also make a 3% contribution into your retirement account with the KPS-MP.
If you are eligible for automatic enrolment you cannot by law opt-out in advance.
Once you have been automatically enrolled you will have the opportunity to opt-out of the KPS-MP. Legal & General will confirm the out-out process within your Welcome Pack.
The Automatic Enrolment legislation requires us to re-enrol you from time to time (broadly every 3 years), but you can choose to opt-out on each occasion.
When you receive your Welcome Pack from Legel & General confirming you have been automatically enrolled there will be instructions on how to opt-out, if you want to.
You will have a period of about a month to opt-out and receive a full refund of any contribution you have paid. If you opt-out after this deadline then your leaving options may change.
Please note that if you do not want any contributions deducted from your pay you will need to opt-out before your payroll cut-off for the month.
If you choose to opt-out of the KPS-MP, your death in service cover will reduce from four times salary to two times salary, if you joined the Company before 30 June 2012 or one times salary if you joined the Company after 1 July 2012.
See Death Benefits for more information.
The legislation states that employees who meet the eligibility criteria will have to be re-enrolled if they opt-out of the KPS-MP.
For most people that will be around the third anniversary of our “staging date”. However there are instances when people will be re-enrolled before that time, for instance, if you chose to join the KPS-MP because you did not meet the criteria then ceased membership. Or at a later date after the third anniversary if you did not meet the criteria on the 3rd anniversary.
You will have the opportunity to opt-out each time you are automatically enrolled.
There are a number of benefits:-
- Tax efficient way of saving for your retirement as you will receive tax relief on the contributions you make into the KPS-MP.
- Your employer also makes a contribution into your Retirement Account.
- You can make your own investment choices from the range of funds on offer.
- As an actively contributing member of the KPS-MP your Death in Service cover will increase to 4 x salary.
The KPS-MP is set up as a trust which means that all the money held within the KPS-MP is completely separate from Company finances.
Your contributions will be invested in the KPS-MP’s default fund, “Lifestyle Cash Target.
This fund involves moving your investments automatically from higher to lower risk funds the closer you get to retirement. Moving your investments is done automatically for you free of charges and assumes that you will be retiring at 65, which is known as your Selected Retirement Age (SRA).
The movement of investments from higher risk to lower risk occurs 5 years before your SRA. For further details see the Investment options page.
Yes, you may change your investments at any time and as often you wish to the range of funds the KPS-MP offers, full details of which can be found on the Investment Option page. Each fund has its own characteristics, risk levels and annual management charges.
By law neither the Trustee, your employer or Legal & General can advise you on your investment choices. You may therefore wish to seek Independent advice
SMART Pensions is an alternative way in which you can contribute to the KPS-MP.
Most active members will begin to pay their contributions via this method once they have been in the Scheme for three months.
For more information, please refer to the Smart Pensions.
If you leave your current employer but remain in the Kingfisher Group (and continue to meet the eligibility criteria), your new employer will automatically enrol you into the Scheme if you opted out before under your previous employer.
If you have not opted-out, then no action will be taken and you’ll carry on paying in as normal. You will simply remain a member of the KPS-MP.
Under these circumstances if your contract of employment is with a recruitment agency then you may be automatically enrolled depending on your circumstances but by the agency and not by the Kingfisher Group employer.
If you have any questions please contact your recruitment agency.
Yes, you may join the KPS-MP and continue to pay into your own personal pension. However, please note the Company will only contribute to the KPS-MP.
Please see the Contributions page for details of the Company matching contributions.
Please note, from 6 April 2014 the annual allowance for tax relief on pension savings in a registered pension scheme was reduced to £40,000. This includes contributions made by anyone else into your pension such as your employer.
I expect to be automatically enrolled. If I decide to stop making payments into KPS-MP after the opt-out option has expired but before I have two years membership, would I be offered a refund of my contributions? If so, what elements of my Retirement Account would be refundable and would an administration charge be made?
If you opt-out of the KPS-MP with less than two years membership, you will have the following options:-
- You can transfer your KPS-MP benefits to another registered pension scheme. The transfer amount will reflect the value of your investments on the date of transfer.
- If you are aged 55 or over, you may retire from the KPS-MP subject to the Trustee and Company consent. Please see click here for further details.
Your Welcome Letter from Legal & General will include details on how to register on their website.
Legal & General can be contacted directly on 0345 0264 179
8.30am – 7pm Mon to Fri / 9am – 12 pm Sat
or alternatively their email is email@example.com
You should be able to update your personal details online by logging into your Retirement Account through Legal & General or by contacting Legal & General directly on 0345 0264 179.
However personal details such as date of birth, National Insurance number, personal address and marital status will need to be updated through your HR contact.
We therefore recommend you check with your HR contact as to whether your details are correct on the payroll system, as this information is fed through to Legal & General on a monthly basis to update.
Although you are 11 years away from retirement it is still worth considering the option to join the KPS-MP. There are a number of benefits of becoming a member of the KPS-MP:
LIFE ASSURANCE BENEFITS – once you become an active member of the KPS-MP, your death in service cover increases to 4 x salary. So it might be worth looking into what the minimum contribution of 3% will be for you and whether the cost of this is more competitive than the retail life assurance you might have privately.
COMPANY CONTRIBUTIONS – As both you and the Company will contribute, your pot can grow more quickly than if you were saving on your own.
TAX EFFICIENT – Any contributions you make into the KPS-MP will be free of tax. So if your contribution percentage is 3%, for every £100 of your basic pay, you will put in £3.00 and the Company will put in £3.00. However the actual cost to you will be £2.40p, as £0.60p of it will be the tax relief from your contributions.
You may have other priorities for your money right now, such as paying your mortgage or others expenses, but you should still have a think about how you plan to cover your spending at retirement. Does what you have in place cover it or do you think you should be saving more?
Anyone who joins the KPS-MP, either voluntarily or through automatic enrolment, will have to have three months pensionable service before they can start paying their contributions via SMART.
Once you have completed three months pensionable service, your contributions will automatically be made via SMART. If, you do not benefit from SMART, your contributions will made by Non-SMART.
So if you do benefit and start paying your contributions via SMART, you should notice a change in your payslip.
Further information regarding SMART can be found here.
Yes, you will receive tax relief on the contributions you pay into your Retirement Account regardless paid through SMART or not.
The additional relief you will receive by paying through SMART, are National Insurance Savings.
If you move abroad and leave the Company, you will become a deferred member of the Scheme.
Once you leave, Legal & General will provide you with further information as to what your options are.
To obtain further information you can either contact Legal & General on 0345 0264 179 or Group Pensions on 0303 334 7080.