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Phasing, does my client have to contribute?

Phasing - My client has two employees who are entitled under AE.

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With regards to phasing, my client has two employees who are entitled under auto enrolment. Am I correct in assuming my client still does not have to contribute to the pension? Does the employee have to increase their contribution to remain in the scheme? For non-eligible jobholders who have opted in, would they also need to increase to the new 5% rate? This client is using NEST.

Thank you!

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By HuntFord
16th Apr 2018 17:23

Everything that was true about AE before is still true now, just with different rates.
If an employee opts out or leaves the scheme then no one has to contribute.
The increased contribution %'s from April have to be applied the first time you pay after 6th April. There is a little known clause that allows people to reduce their contributions after that but stay in the scheme, however the employer may have no obligation to continue to contribute on their behalf, depending on the pension provider's rules.
This is a quote from the following link:

"If a member does not wish to pay the increased contributions due in April 2018 and 2019 the scheme rules or terms and conditions may allow them to remain at the lower contribution rate, or to reduce their contributions again after the increase.

This will mean they continue to be a member of the scheme, but as contributions are below the minimum level required by law, the scheme will not be qualifying for them.

Depending on the scheme, the member may no longer receive employer contributions."

http://www.thepensionsregulator.gov.uk/doc-library/increases-in-minimum-...

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Replying to HuntFord:
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By Alex_T
16th Apr 2018 17:35

Many thanks, HuntFord. That's very helpful!

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