Increases in automatic enrolment pension contributions
28 February 2018
Have you let your employees know about the increases to their auto enrolment pension contributions from 6 April 2018? The Pensions Regulator has updated their template letter for employers.
From 6 April 2018, employers will have to contribute a minimum of 2% into their employees’ workplace pension, and employees will have to contribute the shortfall from a portion of their earnings, to make a total of 5% paid into the employees’ retirement savings.
The employer can pay more than the minimum and can choose to pay the 5% meaning employees would not have to contribute.
The minimum contribution levels will rise again on 6 April 2019, with the employer paying a minimum of 3% towards the pension, and the total minimum contribution reaching 8% - with staff making up the difference.
It is important that staff know about the changes, not only to appreciate the benefit it will bring but to minimise queries to the payroll department when their pay is less than expected. Why not let them know about the 2019 changes at the same time.
The Pensions Regulator has updated their letter template for increases in contributions, in order to help employers communicate the increases to their staff.