The minimum amounts to be paid into employee’s workplace pensions is set to increase from 6 April 2019, and employers are responsible for making sure these increases are implemented.
This applies to all employers with staff in auto enrolment pension schemes, or those who decided to use an existing scheme.
Currently employer’s must pay in at least 2% and employees at least 3% of the qualifying salaries into the scheme. From April 2019 this will increase to 3% for employers and 5% for employees.
Employers will be allowed to pay more and employees less, providing that the 8% total minimum contribution is reached.
As a reminder the calculation is based on a specific range of earnings. For example for 2018/19 it is between £6,032 and £46,350 per year. Earnings includes salaries, wages, commission, bonuses, overtime, statutory sick pay, statutory maternity pay, statutory paternity pay and statutory adoption pay.
You should also ensure that your staff are notified of the changes and The Pensions Regulator has prepared a template letter for telling your staff what is happening.
CB Reid is prepared for the change, but if you have any queries or concerns please contact Katrina or Angela in the payroll team.