Here’s an interesting article written by the Head of Benefit Strategy at Jelf Employee Benefits…
A couple of weeks ago represented a return to the workplace for many after the Easter bank holiday break. But with many eggs yet to be opened – let alone actually eaten – the Jelf Employee Benefits team are already looking ahead to the same holiday period next year.
Our foresight is not driven by a love of all things chocolate*, but instead a major change to the contribution requirements under pension Auto-Enrolment (AE) legislation. This change will arise immediately after the 2018 Easter break.
From next April the legislation dictates an increase to both the Employer and Employee AE minimum contribution levels. This represents a significant increase to both parties from the current base levels, and therefore planning, budgeting and communication will all be key areas for many companies to consider as this date approaches. This may also mean that employers will need to include these extra costs and activities in their business plan during the current financial year. For details of the minimum contribution levels from 2018 please see this link to The Pension Regulators Website.
Of course many organisations will already be paying more than the required minimum levels, and will therefore not be directly impacted by this change. That said, there is likely to be some significant media noise around the minimum increases, so ensuring that your employees understand that there will be no change for them – whilst also driving home the message that their employer is actually paying more than that required by the AE legislation – will both be important communication missions for such employers.
Another Auto-Enrolment point worth noting is the continuing need (and requirement) for employers to undertake an Automatic Re-Enrolment process every three years. This extra responsibility may be seen as rather onerous, but does present the sponsoring employer with a great opportunity to revisit their Auto-Enrolment decisions, and take corrective actions as necessary. We wrote on this topic last year, and that post can be read here.
So our key message to all employers is to start planning for the AE changes post Easter 2018 right now. If you have any questions please contact Jelf, our pension advisers, on 01634 360000.
*although that is a pretty good reason also!