 Fellywch. Philip yn cael ei wneud hynny'n ddysgu chi'n gwybod. Felly rydw i'r ddweud. Dwi'n meddwl, y penderfyniadau ar y syniadau, rydyn ni wedi'i gweld y rhan o'r llunau British. Rydyn ni'n meddwl. Rydyn ni'n meddwl o'r prifysgol. Felly, ar y cyfnodau, mae'n gweithio'n gweithio'n gweithio. Rydyn ni'n meddwl. Llywodraeth wedi cael ei wneud o'r Cymysgau Pensions, ac rwy'n meddwl i'r Cymysgau Pensions yn 2005, ac mae'r Cymysgau Pensions wedi cael ei wneud o'r gweithio, ac yn cael ei wneud o'r Cymysgau Pensions ac yn cael ei wneud o'r 2008. Now I'm going to do a bit o'r Everything Technical stuff as quickly as possible. But with comments amongst them before I pass over to Francois for more of the comment. And I'm starting with an advertisement. I don't think I realised that the pension regulator was going to be here today. But I was just going to draw your attention to the fact that his office Mae'r newidau rhan o ddechrau'r cyfromysg rydyn ni i fydd yn clywed yn meridio bethau ystyried a amser ymddangos yna ein gwaith o'r Ddaethau. Fyddo'n cael ei ddweud y rhan o'r hyn, ond mae'n bod yn ysgolch o fynd i'r ysgolffod pethau i'r websiteau a'r ddechrau'n gwybod yw'n bod argymru ar y cyfromysgau a'r ddim yn gwylion gwasanaeth. Felly rwy'n credu i fydda i wadwch eich cynnig. Mae'r cyfromysg rhan o'r newid, ac mae hyfrydd eich cynnig. I don't want to be condescending, that means speaking down to the audience, damn it, I've done it. But staging date is when it starts for you. Now, there is the brief guide, it's dictated by the number of people on your PAYE base, and if you have more than one in your company it's according to the biggest. And you don't need to remember or work out exactly when it is, because the regulator is going to be helpful. He'll be writing to your 12 months, all employers 12 months before the relevant date for them, and again three months before the date. But actually it would be smart for you to know now, there's quite a bit of work to do exactly when it's going to apply for you. You can actually, if you wish, jump the gun. I think I've heard of one or two employers who say well let's get on with it and they might well do that. So that is an option if you so wish. So the staging date, that's when it all starts for your company. Now, the qualifying criteria must allow the employer to automatically opt in and re-enroll a job holder. It's auto-enrollment. We think this is a good idea, it hasn't been tested, although until the mid 80s companies were allowed to oblige their employees to join pension schemes, but that was taken away, it was seen to be a restriction of freedom of choice. But actually when it comes to pension benefits and saving for retirement, the truth is that most people do need a discipline imposing on them. So auto-enrollment is not a new idea, but we think it is a good idea and it's the best way to make sure that as many people as possible have pension provision. I'm so old I can remember the good old days when we did have healthy, open, large British pension schemes, but even at their best they only ever reached half the employed workforce and this is a big step towards doing rather better than that. Now, the scheming question that will be used for auto-enrollment must be a tax-registered occupational scheme or a personal pension scheme. Some non-UK pension schemes can be qualifying, it's a little complicated and I won't go into that detail now. More jargon and names which at first sight are confusing. We have eligible job holders, we have non-eligible job holders and we have entitled workers. Eligible job holders are the main category. Those are those earning more than £7,475 a year. These are 2012 figures. They must be in the age range 22 to state pension age and yes, if they pass those two tests, they're entitled for auto-enrollment, they're entitled for company contributions and yes, they may if they wish opt out. There's two categories of non-eligible job holders. Those who are earning less than £7,475 and in the age range 16 to 75 are not eligible for auto-enrollment but they would be eligible for company contributions if they choose to opt in. The other way in is designed for those who are earning more than £7,475 but they're aged between 16 and 22. So again, they would be eligible for company contributions if they choose to opt in. The most confusing title is the entitled worker which means that no, they're not eligible for auto-enrollment and no, they're not eligible for company contributions. They may join but entitled worker is a bit of a misnomer but you need to get used to the terms. Now, some of you already have workplace pension schemes and they mail well, in fact, if you already have a scheme, it's more than likely that it would be good enough to pass muster for the new requirements. If you have a DB scheme, defined benefit scheme, then if it is contracted out of the state second pension then it is by definition good enough. It's good enough as a vehicle to provide auto-enrollment for those people who are eligible. If it's not contracted out, it's going to be okay if the level of benefit is at least 120th of salary, that's about half the usual best rate of 60th, payable from state pension age. Now, if you have a career average scheme, a care scheme as it's known, then it is necessary to ensure that there's annual revaluation of benefits both in service and in retirement. As I said before, your existing scheme does have to be a UK tax registered scheme, company scheme or personal pension scheme. So, yes, most existing schemes will qualify. Now, minimum requirements for DC defined contribution schemes are not terribly complicated but a little different. Obviously being DC, whether they're good enough is all about is the contribution rate sufficient. And the contribution rates must apply to earnings in the range 5,035 to 3,540. Now, those are already out of date. Those are 2007 figures and will be updated. We'll know the actual ones early next year. But from October 12, when this brave new world of auto-enrollment kicks off, then there must be a 2% total contribution which at least 1% must be employer because the total is being phased in. From October 16, it must be a 5% total including a 2% employer contribution and 8% from October 17 including a 3% minimum employer contribution. So DC, it's very easy. It's all about making sure that your contribution rates are sufficient. More about salaries here because it's quite possible that you may have or choose to have DC schemes which are not actually covering total earnings. They might be restricted to base pay, category one in that picture. Or they might be based on some pensionable pay figure which would need to be at least 85% of total pay or it could be total pay. Now, that looks complicated but the gist is that if you are choosing for your own practical convenience to base your auto-enrolled DC scheme on, say, basic pay, you may do but you're going to have to pay a higher contribution rate. For example, the total contribution rate by staging period jumps up from 2% to 3% and at the end of the day, jumps up from 7% to 9% and the similar effect on the employer contribution. So there is flexibility to choose how you are going to decide what will be pensionable pay in your auto-enrolled scheme. Now, hybrid plans, that is, those pension plans in that large space between DB and DC. You referred to the improvements reform of state pension benefits and I'd be happy to congratulate the minister when he arrives later today on the good work he's doing there. And if I do have a quibble and he knows it, it's that here we are, employers facing auto-enrollment and the government, the last two governments and the coalition government have not yet responded to the pleas to open up this middle ground to imaginative pension schemes sitting between DB and DC. Actually, the minister in recent weeks has said that he is now going to turn his attention to opening up this middle ground to make it easier to have pension schemes which are rather better than DC covering some of the risks that Philip talked about but actually not exposing employers to all the risks that are inherent in a DB scheme. So, I encourage the minister to do that quickly but we are leaving it rather late to see what type of hybrid risk-sharing scheme might be allowed. Now, Nest, you will have heard of, I think, the National Employment Savings Trust is being set up and that is aimed at low earners and those, I say, micro-employers who would probably be unwilling, unable or find it impractical to set up their own pension plan. So, if you haven't got your own qualifying plan and you reach your staging date then Nest is where you will end up. It is a DC pension plan and subject to the risks that Philip outlined and there is a cap on contributions. The government seems to be, I think their story is to try and help not take away too much business from the private sector so they've set an annual contribution limit of £4,200 on how much can go into Nest and for the same reason they are not, they're saying they're not going to allow people to bring into Nest previous pension benefits or indeed transfer them out although they are going to review that restriction in 2017. So employers may well use Nest, you don't have to be a small, any employer can use it and indeed you may use it for just some of your workforce. I should have said that you're not restricted to one scheme, you can use more than one qualifying scheme to meet your obligations under auto-enrolment. So some companies may use them for people with they perceive high turnover or low pay groups. We shall see. Now, Nest investments, it's going to be pretty big we think, Nest investments is a bit tricky because they are alert, Philip, to this problem of Fred on the shop floor finding out at the end of the year that 4,000 has gone in and he's only got 3,000 left just because of the volatility in the markets. So the blue approach on that chart indicates that Nest intend to start their people off with low risk investments and only later on start branching out into the higher reward but ultimately riskier investments. Now that actually is the opposite of what would normally be seen as conventional for a DC scheme. You'd normally say you can put your savings into these volatile but hopefully higher rewarding investments in the first part of your career and you ought to start going conservative as you approach retirement. But we shall have to see. Nest, there's no safety net, isn't it strange that we have a pension protection fund for divine benefit schemes but there's no protection or support for DC schemes. Notwithstanding that in these last 10 years more people have lost more pension expectation in DC schemes than has ever been lost in DB as a direct consequence of these volatile markets low interest rates and increasing longevity. I worry about a sense of complacency. People thinking I'm in Nest, I'm in a pension scheme, I'm sorted, I don't have to worry. Even when Fred approaches retirement and is told he's got 30,000 quid an amount of money that he's never actually had in one go before he might feel quite smug but he'd be very wrong because that's when the penny drops and he finds out that 30,000 quid at retirement should, with a bit of luck be able to provide him a pension of 20 pounds a week. That's not really a very good base for retirement. Taking benefits from Nest is very similar to a UK scheme. You can dip in from age 55 and you can have a quarter of it as a tax-free lump sum. Very tiny amounts can be commuted but we're still waiting for more information on other retirement options. They are aiming for a highly electronic administration of the scheme which makes sense and they're also expecting people to switch on retirement benefits without advice. I can understand the practical reasons for that but actually it's the Fred through the 30,000 pounds who actually need a lot of advice. OK, very quickly. When to automatically enroll the first data worker becomes an eligible job holder but there is this, cat you refer to this, there is this three months window we've got to give information to the eligible job holder but there is a three months gap if it suits us and if we're using say a closed DV scheme that we already have for automatic enrollment then we can postpone using it for that purpose up to October 2016. Details apply but more of those on another occasion. But as you understand I think although we ought to enroll our people, eligible job holders into schemes we don't have to keep them there they can opt out they have to give an opt out notice and all the relevant information. Entitled workers remember those are the people who are not entitled Entitled workers have no opt out rights but they will have a 30 day cancellation period. It's not possible to opt out after the opt out period has ended but job holders can always see active membership. Now at the opt out period as I said there's a joining window of a month and then there's an opt out window of another month. So there's a bit of scope there for planning how you are going to deal with the opting in, opting out process. Now you need to bear in mind that these notices about the nuts and bolts of opting in and out must be provided normally by the pension scheme not the employer. Okay well if the employer runs a dedicated pensions administration team it obviously makes sense that they're involved and that's okay but it is the pension scheme's obligation responsibility and any opt out notice given by a member must be checked by the employer he must stop deducting contributions let the scheme know and issue any refunds and there are various time limits for refunds the employer will have to watch that because if the pension scheme is going to be slow at making refunds then the employer will have to step in. Finally just a few tax issues there might be a few lucky people out there well there are quite a few actually who are caught by fixed protection under the tax rules the tax simplification rules from 2006 take care with any such people in your companies because if they're inadvertently enrolled into a pension scheme they will lose their automatic tax protection under that act salary sacrifice we're still waiting for the details from the department as to how those will work in practice. Okay so time to start preparing there is a lot of work to do one find out when your staging date is two just work out how many people are going to be involved in auto-enrolment which pension schemes you're going to use and it might be nest you might have to tweak your scheme check all the internal procedures and finally be ready to issue all the necessary communication thank you