The minimum amount which an Employer and an Employee must pay into the workplace pension (Auto-Enrolment) scheme is changing. From 6 of April 2019 the minimum contributions employers and staff must pay into automatic enrolment workplace pension schemes will increase. This will increase the overall payroll expense not just by pension contribution, but with the hidden additional cost for any employer intending to raise gross base pay this year.
Please note the changes below:
Employers should be aware of the following:
- These changes apply whether a scheme was set up for auto-enrolment or is an existing scheme which falls within the rules. It will not apply to Defined Benefit schemes
- Contributions will vary depending on the type of scheme chosen, as well as the rules of the particular scheme and any tax reliefs applied. Employers should refer to the scheme rules or speak with their pension provider for clarification
- Employers can choose to cover the total minimum contribution required; meaning employees may not need to pay anything
- If you, or your staff, are already paying above the increased minimum amounts (in total) no action is required.