To ensure that your pension scheme continues to be 'qualifying', have you prepared your employees for this increase?
The minimum contribution levels required depend upon which basis of earnings your scheme uses.
Qualifying Earnings Basis
| Employer Minimum | Employee Minimum | Total Minimum | |
| 6.4.18 to 5.4.19 | 2% | 3% | 5% |
| 6.4.19 onwards | 3% | 5% | 8% |
Tier 1 - Basic Earnings Basis
| Employer Minimum | Employee Minimum | Total Minimum | |
| 6.4.19 onwards | 3% | 3% | 6% |
| 6.4.19 onwards | 4% | 5% | 9% |
Tier 2 - Basic salary equates to at least 85% of total salary
| Employer Minimum | Employee Minimum | Total Minimum | |
| 6.4.19 onwards | 2% | 3% | 5% |
| 6.4.19 onwards | 3% | 5% | 8% |
Tier 3 - Total Pensionable Earnings
| Employer Minimum | Employee Minimum | Total Minimum | |
| 6.4.18 to 5.4.19 | 2% | 3% | 5% |
| 6.4.19 onwards | 3% | 4% | 7% |
If your organisation and/or employees are already contributing in excess of the minimum employer contribution, no action is required.
Can an employee pay below the statutory minimum?
Yes, if the jobholder chooses to keep their contributions to below the minimum required in April 2018, the pension scheme will no longer be a ‘qualifying’ scheme for them.
Existing scheme members should put their request in writing.
You will need to remember to re-enrol them for automatic enrolment at your 3 year re-enrolment date.
New Jobholders must be automatically enrolled into your qualifying scheme. They cannot be automatically enrolled at a lower contribution level.
You must ensure that you do not break the employer inducement rules if you permit lower employee contributions.
For more information about our services or to arrange a meeting with one of our consultants, simply complete our enquiry form, send us an email or call our Cambridge office on 01223 720209.
The following subsidiary of NW Brown Group Limited is authorised and regulated by the Financial Conduct Authority to provide regulated services: NW Brown & Company Limited (191223).