You are no doubt aware that the government introduced measures in the 2008 and 2011 Pensions Acts designed to increase workplace pension saving.
Under the ‘auto-enrolment scheme’, employers will have to enrol all of their qualifying workers into a workplace pension scheme and each employee will have to actively opt out if they do not want to be a member. Contributions will start at 1% from the employee and 1% from the employer. Once all employers have implemented the scheme, contributions will increase in stages with firms eventually putting forward at least 3% of their employees salary, and the employee adding at least 5%. The employees contributions will also benefit from 20% tax relief.
The minimum contributions that you must pay into your staff’s pension scheme are shown in the following table:
|Date||Employer minimum contribution||Total minimum contribution|
|Employer's staging date to 05/04/18*||1%||2% (including 1% staff contribution)|
|06/04/18* - 05/04/19*||2%||5% (including 3% staff contribution)|
|06/04/19* onwards||3%||8% (includng 5% staff contribution)|
*The proposed dates are subject to Parliament approval
Each employer is assigned a date on which its duty to auto-enrol commences. This is known as a staging date and is based on the number of employees in the PAYE scheme(s) operated by that employer. To confirm your business’ staging date you can use the regulator’s interactive tool at thepensionsregulator.gov.uk/employers/tools/staging-date.aspx.
You will need your business’ PAYE reference to do so. Rothmans are working with employers to help them decide on the best course of action for their businesses assisting them to put the required changes in place.
Please contact your local Rothmans office for more details of how we can help you.