The minimum contributions your organisation must pay into your staff workplace pension plans increased on 6th April. You need to include the new pension rates when you process your first payroll after 6th April.
Have you informed your employees of the increase, as the employee as well as the employer needs to increase their contribution? The total payments must now be no les than 8% of qualifying earnings. The employer has to pay a minimum of 3% and the employee pays the rest.
A recent survey by our professional body, CIPP found that 11% of the respondents have not informed their employees of this increase. Surely, this is going to cause these organisations a lot of extra work when their employees see the increase on their payslip and query this with their payroll department, and possibly even opt out of their pension.
Most of the respondents (46%) said they had communicated the increase via personal letter. There are letter templates <link to pdf https://www.thepensionsregulator.gov.uk/-/media/thepensionsregulator/files/import/pdf/minimum-pension-contribution-increases-letter-phasing.ashx?la=en&hash=2DECCE11E5664FD9689C7B5CE17F977F1025355F&utm_source=256Phasing2019_Experian_HR_Internal&utm_medium=email> available from The Pension Regulator, if you have not already informed your employees. You should by now have also made sure your payroll team and software providers have got your systems ready for when you run your first payroll after 6th April.
If you are a Payroll Masters client, then you don’t need to worry. We will have already planned for this increase with you. If you are not already a Payroll Masters client, and you would like to learn more about our outsourced payroll management solutions, please get in touch. We are based in Birmingham, with clients all over the UK.