What you need to know about these changes

By law, when joining a workplace pension scheme a percentage of an employee’s earnings are automatically placed into the scheme. In addition to employee contributions, employers are legally required to contribute to their employees’ pensions.  Since the introduction of automatic enrolment, the government has outlined the minimum contribution levels both an employer and employee must adhere to, which can vary depending on the scheme type an organisation chooses.

From 6 April 2019 the total minimum contribution rate will rise to 8%, of which employers will be required to contribute a minimum of 3%. An employer can contribute more than the minimum of 3% if they chose to, thereby reducing the contribution required by their employees.


What must you do?

If you have not already, you should review your current arrangements. 

All employers should ensure contributions are paid into the scheme based on the minimum requirements or the rules of their own scheme if these are preferential.

It is your responsibility to ensure the implementation of these changes and as such you should make arrangements with your payroll/administration team in good time to ensure changes are implemented correctly.

It is also good practice to communicate the rise in contribution rates to your employees prior to the changes being implemented on 6 April 2019.


Who does this apply to?

This is applicable to any organisation with employees based in the UK.

If, however your organisation is already paying above the increased minimum amounts, or your workforce are not registered in an automatic enrolment pension scheme, no further action is required. 

Similarly, if you are using a defined benefits pension scheme the increases do not apply.

Should you wish to speak to us regarding these changes, or in relation to your organisation’s automatic enrolment responsibilities please call 0345 357 8910. Alternatively, you can email employeebenefits@lffp.co.uk.

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