Pensions Auto Enrolment – Compliance Update

Increases in Minimum Contributions

The minimum contributions that have to be paid into your Automatic Enrolment pension scheme are increasing again from 6th April 2019.

The amount that you and your staff pay into your pension scheme will vary depending on the type of scheme you have chosen and the rules of that scheme. Most employers use pension schemes that currently require a total minimum contribution of 5% to be paid.

By law a total minimum amount of contributions must be paid into the scheme. The employer must make a minimum contribution towards this amount and the employee (or worker) must make up the difference. If you decide to cover the total minimum contribution required, your employee won’t need to pay anything.

This table shows the minimum contributions you must pay and the date when they must increase:

 

  Employer minimum contribution Employee contribution Total minimum contribution
Until 5th April 2019 2% 3% 5%
6th April 2019 onwards 3% 5% 8%

 

You will need to budget for these increases and It is your responsibility to make sure they are implemented.

If you have any queries regarding the minimum contribution percentages or your auto enrolment obligations in general please contact us. 

Re-enrolment

Every three years you must put certain staff back into a pension scheme. This is called “re-enrolment”.

Your duties will vary depending on whether you identify that you have staff to re-enrol, or whether you have no staff to re-enrol. Either way, you will need to complete a Re-declaration of Compliance to inform The Pensions Regulator how you have met your duties.

What you need to do and by when:

  1. Now you should:
    Choose your re-enrolment date from within a six-month window, which starts three months before the third anniversary of your automatic enrolment duties start date and ends three months after it.
  2. On your re-enrolment date:
    You’ll need to assess certain staff to work out if you need to put them back into your pension scheme.
  3. Within 6 weeks of your re-enrolment date:
    You need to write to staff to tell them that you’ve put them back into a pension scheme.
  4. Within 5 months of the third anniversary of your duties start date:
    You need to tell The Pensions Regulator how you’ve met your legal duties for re-enrolment by completing your Re-declaration of Compliance.

Remember, re-enrolment and re-declaration are your legal duties and if you don’t act you could be fined.

If you would like assistance with re-enrolment or the re-declaration process then please contact us.

 

This information is intended as a general overview and discussion of the subjects dealt with. The information provided here was accurate as of the day it was posted; however, the law may have changed since that date. This information is not intended to be, and should not be used as, a substitute for taking legal, HR or benefits advice in any specific situation. Petaurum Solutions is not responsible for any actions taken or not taken on the basis of this information. Please refer to the full terms and conditions on our website.

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