Government Pension Scheme on Employers

Just when you think there cannot be anymore paperwork left to complete, along comes another change to pension contributions.

Hopefully, you should already have made the necessary changes from the start of April.

That was the date when employer contributions to workplace pensions rose to a minimum of three per cent.

Making the increase should be straight forward enough but there are a number of things to bear in mind.

For one thing, if you self-certify your workplace scheme you will have different minimum contribution increases, depending on how pensionable pay is calculated. 

For example, the Pensions Regulator says that if contributions are based on gross earnings but don’t include bonus, overtime, commission or certain staff allowances, the minimum contribution from the employer rises to 4 per cent.

But if all earnings are included in the way contributions are calculated, this falls to three per cent. 

If you haven’t yet told your staff about the changes - simply cracked on with setting the new levels - now is a good time to get around to it. There are templates of the sort of letter you can send on the Pensions Regulator’s website if you need some help.

And a warning to employers who think they can turn a blind eye to the pensions and the changes in the contribution rates.

The Pensions Regulator makes it clear it will impose the law and take action whenever it finds an employer who is not meeting their legal responsibilities.

A spokesman said: "Failing to make and maintain the correct pensions contributions could result in a fine or court action. It is not enough to just comply with automatic enrolment laws by putting staff into a scheme. 

"Employers must also meet their duties to contribute into their employees’ pensions every month and they must ensure they are paying in at least the minimum. Pension providers have a duty to tell us if an employer is not maintaining the correct contributions and staff can also use our anonymous whistleblowing service if they are concerned the correct payments are not being made.”

So now you know.

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