By Mark Jones, director of Carmarthen-based Clay Shaw Butler chartered accountants and business consultants. The Money Matters column appears in the Pembrokeshire Herald, the Carmarthenshire Herald and the Llanelli Herald newspapers.
The Pensions Regulator (TPR) is reminding employers that from 6 April 2019, the amount that will need to be paid into a workplace pension will increase to an overall minimum of 8%, with employers contributing at least 3% of this total amount.
TPR is now starting to write to all employers to remind them of their duties.
The TRP website provides further information on the increases and a link to a letter template advising employees of the increase.
TPR is advising employers that they should also check with their payroll software provider and pension provider to ensure plans are in place ahead of 6 April 2019.
Please contact the team at West Wales chartered accountants Clay Shaw Butler if you would like help with your payroll or pensions auto enrolment compliance.
All employers with staff in a pension scheme for automatic enrolment must take action to make sure at least the minimum amounts are being paid into their pension scheme.
This applies to you whether you set up a pension scheme for automatic enrolment or you decided to use an existing scheme.
However, you don’t need to take any further action if you don’t have any staff in a pension scheme for automatic enrolment, or if you are already paying above the increased minimum amounts.
If you’re using a defined benefits pension scheme the increases do not apply.
What are the increases?
This table below shows the minimum contributions you must pay and the date when they must increase:
Date Employer minimum contribution Staff contribution Total minimum contribution
6 April 2019 onwards 3% 5% 8%
6 April 2018 to 5 April 2019 2% 3% 5%
By law a total minimum amount of contributions must be paid into the scheme.
You, the employer, must make at least the minimum employer contribution towards this amount and your staff member must make up the difference.
If you decide to cover the total minimum contribution required, your staff won’t need to pay anything.
The amount you and your staff pay into your pension scheme will vary depending on the type of scheme you have chosen and the rules of that scheme.
Your staff contribution may also vary depending on the type of tax relief applied by your scheme. You can find this information in the scheme documents sent to you when you set up the pension scheme or you can speak to your pension provider.
Most employers use pension schemes that from April 2019 will require a total minimum of 8% contribution to be paid. The calculation for this type of scheme is based on a specific range of earnings.
For the 2018/19 tax year this range is between £6,032 and £46,350 a year (£503 and £3,863 a month, or £116 and £892 a week). These figures are reviewed each year by the government.
When you are calculating contributions for this type of scheme you include the following:
- statutory sick pay
- statutory maternity pay
- ordinary or additional statutory paternity pay
- statutory adoption pay
What if I am using a pension scheme which requires different minimum contributions?
You may have agreed with your pension scheme to base minimum contributions on different elements of staff pay. If this is the case you will need to apply different increases.
Find out what increases apply to you if you are calculating contributions using different elements of staff pay.
Check your scheme documents to find out what elements of staff pay your scheme uses. If you are still unsure speak to your scheme provider.
It is your responsibility, under the Pensions Act 2008, to make sure the right minimum contributions are being paid for your staff.
More information is available on the Government website –
You can find out more about money matters on the Clay Shaw Butler website (under our news for business section) –
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