Minimum pension contributions increase
From 5 April 2019, the minimum pension contributions will increase from 5% to 8%. So far as we are aware, this will be the last increase in minimum pension contribution for the foreseeable future.
The employer minimum contribution from 6 April 2019 will be 3%, and staff contribution 5%.
If you wish, you as the employer can contribute more than 3% and your employees less than 5%, as long as the total contribution of employees and employers added together is not less than 8% of salary.
We are suggesting that all employers should discuss this with their staff and obtain agreement from all the employees affected. Please bear in mind that although any employee can opt out of the workplace pension, you are not allowed to give any incentives or favourable treatment to employees in order to induce them to opt out. The penalties for so doing can be very severe indeed.
Please advise us what you have agreed with your staff, no later than 31 March 2019 so that we can put it into operation for the payroll going forward.”
All good wishes for 2019.
– By Stephen Handley, FCCA