April 2019 marked the final changes to the government’s workplace pension scheme. After being introduced in 2017, the minimum contributions for employers and staff have risen year on year. With The Pensions Regulator finally cracking down on non-compliance, it’s more important than ever to make sure your pension scheme is up to date.
In this post, we’ll look at what’s changed, how they’re cracking down and how to keep yourself compliant.
Changes to minimum contributions
When the Government introduced the Workplace pension, they outlined three increases over three tax years. On 6th April 2017, it became obligatory for all employers to automatically enrol employees on a pension scheme. Employees had to contribute a minimum of 1% of their wages to the pension scheme, which was matched by employers, on top of their wages.
In 2018-19, the minimum employer contribution rose to 2%, with employees contributing at least 3%. Finally, on 6th April 2019, the minimum rose to 3% and 5% for employers and employees, respectively:
| Minimum employer contribution | Minimum employee contribution | |
| 6th April 2017 5th April 2018 | 1% | 1% |
| 6th April 2018 5th April 2019 | 2% | 3% |
| 6th April 2019 onwards | 3% | 5% |
Cracking down on non-compliance
The Pensions Regulator (TPR) has begun seeking out companies that don’t comply with their duties. They’re comparing data with HMRC to find which employers aren’t making the right contributions. TPR will check any companies who aren’t making the right contributions, or those who haven’t enrolled staff on a pension scheme at all.
UK-wide investigations started in mid-May and will continue throughout the summer. Those found to be none-compliant could face court action and fines. Needless to say, any obstruction to their investigations will also be penalised.
We know the vast majority of employers are doing the right thing for their staff, said Darren Ryder, TPR’s director of automatic enrolment. However, there are a small minority who persistently ignore their responsibilities. They can expect a knock at the door from us and enforcement action.
How to make sure you’re compliant
To be compliant with the workplace pension regulations, employers need to automatically enrol employees onto a compliant pension scheme, as long as they are:
- At
least 22 years old - Below state
pension age - Earning
more than £10,000 per year (or a monthly / weekly equivalent)
Need a hand?
If you’re struggling to keep track of the changing regulations, or don’t have the systems in place to automatically enrol employees, UWM offers comprehensive auto enrolment services for UK
businesses, covering:
- Calculating
which workers are eligible - Determining
the appropriate pension scheme - Confirming
contribution amounts - Setting
up systems for ongoing assessments and changing circumstances - Keeping
accurate records of compliance, opt outs and contributions
In short, our team of Leeds-based accountants can take all the legwork out of auto-enrolment keeping your employees happy and your business 100% compliant.
