The legal minimum pension contributions under auto enrolment were increased effective from 6 April 2018.
The new minimum contribution limits, effective from 6 April 2018 until 5 April 2019, have been set at a total minimum contribution of 5% of qualifying earnings, comprising an employer minimum contribution of 2% and an employee minimum contribution of 3%. For many employers and employees alike this is a significant increase from the previous minimum contribution limit of 1% for both employers and employees.
The minimum contribution limits are set to increase again from 6 April 2019 to 8% of qualifying earnings, as reflected in the table below:
|Date Effective||Employer Minimum Contribution||Employee Minimum Contribution||Total Minimum Contribution|
|Up to 5 April 2018||1%||1%||2%|
|6 April 2018 to 5 April 2019||2%||3%||5%|
|6 April 2019 onwards||3%||5%||8%|
These changes do not affect employee eligibility criteria for automatic enrolment. This criteria remains unchanged.
Every employer has re-enrolment duties which must be completed approximately three years after their original staging date. Employers can choose their re-enrolment date from within a six-month window, which starts three months before the third anniversary of their automatic enrolment staging date and ends three months after it. Employers must assess certain employees at the re-enrolment date. Eligible employees who have opted out more than 12 months before the re-enrolment date must be re-enrolled into the scheme. A re-enrolment declaration of compliance will also have to be completed by employers. This is a legal requirement and if employers do not comply, they could be fined.
If you employ seasonal workers e.g. potato roguers and fruit pickers then you must ensure sure you properly assess these employees for auto enrolment purposes. They are not exempt. There is the option to postpone assessing these employees for a period of 3 months which many employers find useful.
If you would like to discuss any of these points further, please contact me:
01738 441 888
Further information regarding assessing the eligibility of your workforce and your duties as an employer including those for re-enrolment can be found at: www.thepensionregulator.gov.uk.
The information in this blog should not be regarded as financial advice. Laws and tax rules may change in the future. Campbell Dallas is not responsible for content contained on 3rd party sites.