Salary Sacrifice

The Administrators have now issued the court application with a hearing date of 29 February and 1 March 2024. Therefore the Administrators expect to commence the transfer out process in March 2024. It is expected that a transfer out of all clients to new appropriately regulated operators will take 12 months and therefore clients can expect the latest that they will be transferred out to a new operator is February 2025.

As you may be aware Hartley entered into administration on 29 July 2022. This decision was made as a result of serious operational and regulatory issues which caused the Financial Conduct Authority (''FCA'') to impose a number of voluntary requirements on Hartley. Upon seeking professional advice, the director of Hartley concluded that Hartley was or was likely to become cash flow insolvent in the future and therefore opted to place Hartley into administration. The administration of Hartley is conducted by Peter Kubik and Brian Johnson of UHY Hacker Young LLP (the "Administrators").

The Administrators are incurring costs in continuing to administer the SIPPs and Hartley cannot continue to trade in administration without further funding. This is because prior to Hartley entering administration, its source of revenue was a combination of the charges placed upon clients for the establishment of their SIPP within Hartley and the continued administration of their SIPP thereafter. However, as the Administrators team are made up of professionals with attendant market charge-out rates which are higher than the salaried costs of the employees at Hartley, the annual administration charges are insufficient to cover the costs of continuing to administer the SIPPs, identify and agree terms for new operator(s) and subsequently transfer the SIPPs to the new operators. As a result, the Administrators intend to replace the current annual administration fees with a single 'exit and administration charge' (''EAC''). Whilst the SIPP client's terms and conditions grant the Administrators the authority to impose the EAC, the Administrators have filed a court application seeking confirmation that the Administrators can validly apply the charge, whether under clients existing terms and conditions, or under amended terms and conditions. Therefore until such time that the court application process has finished and the EAC has been imposed, the Administrators are unable to process any transfers out of clients to new operators.

Administration is an insolvency process whereby Hartley has been placed under the control of insolvency practitioners who will manage the affairs of Hartley, instead of the director. The Administrators have a statutory objective of achieving a better result for the creditors as a whole than would be likely to be achieved if Hartley were wound up (without first entering administration). As such the Administrators have been operating Hartley since 29 July 2022 (when it first entered administration) in order to transfer out all SIPP clients to a new provider.

Yes, all clients will have the opportunity to identify which new provider they wish to transfer to.

The alternative route to Hartley being in administration and the Administrators transferring all SIPP clients to new operators would be to place Hartley into liquidation. This would have a detrimental impact for all SIPP clients as they could be faced with a de-registration tax charge. This de-registration tax charge is 40% of the cash held in the SIPP plus the market value of any other assets held within the SIPP immediately before it is de-registered.

Yes. Members can alter the funds they are invested in at any time, free of charge.

Yes you can. When selecting a default fund, consider what is suitable for all of your employees.

The fund value would be passed on to their beneficiaries, in most cases free of inheritance tax.

Absolutely, if you’d like to discuss portfolios that are Ethical and those that adhere to Environmental, Social and Governance measures, please contact us.

Yes we do. If you would like to discuss the options further please contact us.

A portfolio is a collection of investments, usually made up of shares, funds and other instruments.

Once a worker selects to opt out, as an employer you must stop deducting contributions and refund any contributions already taken via payroll.

If a worker does not opt out within their one-month window, they can still choose to stop contributing, however anything paid into the pension will remain invested until such a time they are able to access their pension.

Yes, workers can re-join and choose to opt in. In addition, and by law, an employer will be required to re-enrol workers every every 3 years.

Workers can choose to opt in to your qualifying pension scheme if they are not currently an active member. Workers will benefit from the obligatory employer contributions. An entitled worker can use their joining rights to become an active member, however the employer is not obliged to pay any contributions.

No. The Pensions Regulator can view this as an inducement. As an employer you cannot encourage or force workers to opt out. Doing so may result in a penalty from the regulator. Using a provider such as Onepension can help keep you as the employer independent.

As an employer, you can choose to not process a workers request if; the worker has given or received notice to terminate their employment OR a worker opted-in or joined within the past 12 months and subsequently the worker ceased membership of the scheme.

Workers who are enrolled into the scheme have the right to opt out of the pension scheme within one calendar month. It starts from the later of: · The date active membership was achieved · The date they received a letter from you as their employer with the enrolment information Workers must be enrolled as an active member before they can opt out, details of how to opt out will be provided in their joining letter.

Absolutely. You will pre-set the scheme eligibility rules and we shall apply this to contributions and assessments.

This depends upon what basis your scheme is set up on. Each certification level will have minimum amounts. If you would like to talk this through with us please use our contact form or call us.

When we set up your scheme, we’ll also ask you for bank details to set up the direct debit for your member contributions. We will need at least 14 days’ notice before your first contribution to do this.

You can choose a default portfolio for members contributions to be invested in, usually this would be a balanced portfolio. After first contributions are collected, members can choose a portfolio which suits them.

Either by API integration or by CSV upload, we will require workforce data to set up their pension policy, issue member communication and assess the workforce where required.

Yes you can. Automatically you will keep 100% of the savings you make, however some employers choose to reinvest the savings to boost pension contributions. Common percentages are 25%, 50% or 75%.

By sacrificing a proportion of their salary your workforce will pay less Income Tax and National Insurance on the proportion sacrificed. You can choose to take the savings in two ways: Use the Tax and NIC savings to increase your contributions and keep your take home pay the same. Use the Tax and NIC savings to increase your take home pay and keep your pension contributions the same

No, salary sacrifice constitutes a change to an employees contract of employment, it is not within the remit of HMRC and they do not need to be advised.

The employer will have to continue making the payments while the individual is being paid unless the agreement is written in such a way that it stops at certain events, such as parental leave or when long term sick leave starts. Remember that under the rules for parental leave the employer is required to maintain the employees pension contributions at the level they were before the individual started parental leave. They should continue until paid parental leave ends.

Salary sacrifice isn’t for everyone, and you will not be able to exchange part of your salary if it reduces your earnings below the minimum wage.

You can choose a default portfolio for members contributions to be invested in, usually this would be a balanced portfolio. After first contributions are collected, members can choose a portfolio which suits them.

This depends upon what basis your scheme is set up on. Each certification level will have minimum amounts. If you would like to talk this through with us please use our contact form or call us.

Absolutely. You will pre-set the scheme eligibility rules and we shall apply this to contributions and assessments.

When we set up your scheme, we’ll also ask you for bank details to set up the direct debit for your member contributions. We will need at least 14 days’ notice before your first contribution to do this.

Either by API integration or by CSV upload, we will require workforce data to set up their pension policy, issue member communication and assess the workforce where required.

Yes absolutely, contributions can be collected from multiple sources.

You can choose to contribute monthly, or as one-off payments.

We have a range of portfolios to select, depending upon your own attitude to risk. There are also a range of self-select funds for you to create your own portfolio with.

Yes, we accept transfers into your plan. We can also help you trace any old pensions that you may have collected previously.