By law, the total minimum contributions your clients must pay into their staff’s workplace pension schemes increase on 6 April 2019. Your clients need to be ready for this increase, to make sure they’re paying the correct amounts into their staff’s schemes.
Are your clients ready?
From 6 April, the total minimum contribution including employer and employee payments must be no less than 8% of qualifying earnings. Your clients must pay a minimum of 3%, with their staff making up the rest of the 8%.
Your clients can choose to pay more than their 3% minimum contribution if they wish. If they do, their staff won’t need to pay in as much to meet the total minimum contribution of 8% of qualifying earnings.
|Date effective||Total minimum contribution||Employer minimum contribution||Staff contribute the remainder|
|Current rates||5%||2%||Up to 3%|
|6 April 2019||8%||3%||Up to 5%|
Your clients should be ready to calculate contributions using the new rates the first time they pay their staff from 6 April.
Your clients may have agreed with their scheme provider to calculate minimum contributions in a different way. This is called certification, and details of what they need to do can be found on our website.
- it should be simple for the new rates to be applied, but your clients should prepare now by contacting their payroll and software service providers to make sure their systems are ready
- we recommend that your clients write to their staff to let them know about the increase in contributions – letter templates are available for employers and foremployers of care assistants as well as in other languages for staff who may not speak English
Please note, if your clients already contribute more than the total minimum of 8% into their staff’s workplace pension schemes, or they use a defined benefit (DB) scheme for automatic enrolment, they don’t need to take any action. And if any of your client’s staff asked to be put into a scheme that your clients don’t pay into, the increases don’t apply to them.
Remember – your clients rely on you as a trusted source of information, and you have an important part to play. We’ve been writing to let employers know what’s happening, and they may contact you to find out more about what they need to do, so you should be prepared to answer their questions.
And finally, join us for a webinar from 2:30pm to 3:30pm on Monday 18 March, where our expert panel will be talking about the upcoming contributions increases. It’s here our experts will guide you through your responsibilities, and will answer any questions you have in a live Q&A session. Register for the event here.