The minimum pension contributions are increasing from 6 April 2019 for both the employees and employers.
So how does this effect business?
- If you have eligible employees in an auto enrolment pension scheme, you will have to ensure that the minimum amount is paid by both yourself, the employer and your employee(s). You can pay more than the minimum if you so wish.
- If none of your employees are eligible for an auto enrolment pension scheme, then you need take no further action.
From 6 April 2019
- The employee’s contribution will be increasing from 3% to 5%
- The employer’s contribution will be increasing from 2% to 3%
Therefore, the total minimum contribution will be 8% when the new rates come into effect.
Under the Pensions Act 2008 it is the employer’s responsibility to ensure that the correct minimum contributions are paid. If you pay above the minimum contribution, then you do not need to do anything unless you wish to increase the amount yourself. As an employer you should inform your staff of the increases that will be taking place.
Also, you have an ongoing responsibility in relation to auto enrolment duties. Each time you pay your employees you need to assess whether they meet the necessary auto enrolment criteria. If they do, they will need to be enrolled into the pension scheme, unless they decide to opt out.
If you wish to discuss auto enrolment and how we can help, then please call on 0113 286 4486.
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