Auto Enrolment – increase in contributions

The minimum contributions that you and your employees pay into your workplace pension scheme are increasing again from 6 April 2019. This is also sometimes known as phasing. It is your responsibility to make sure these increases are implemented, you should start preparing now by discussing and planning with your payroll providers to make the change for the April payroll.

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

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

Very Important Note:  If you are using one of the three alternative contribution certifications to meet the minimum contribution requirement, the relevant phasing tables can be found here

Automatic Re-enrolment

On the third anniversary of your staging date, you must re-enrol anyone who has opted out, as well as those who’ve ceased active membership and are eligible employees.  You can choose to do this on a date from a window of up to three months before or three months after the third anniversary of your staging date. This is called your ‘re-enrolment date’. Postponement (where you may delay working out who to put into a pension scheme) can’t be used at re-enrolment.

Those who have opted out within the 12 months prior to the pension scheme re-enrolment date won’t need to be re-enrolled on this occasion, but on the next re-enrolment date instead. Eligible staff must be written to individually, within six weeks of the chosen re-enrolment date to tell them how automatic enrolment applies to them.

It is  a legal requirement that once you’ve re-enrolled, you have to re-declare your compliance with The Pensions Regulator within five calendar months of the third anniversary of your staging date (or last re-enrolment date) – if you don’t, you could be fined. This has to happen whether or not there are any employees to re-enrol.

Further information can be found on the Pension Regulators website here

Contact us if you need advice