Change to Pension Contribution

AmyLou125

I have been informed at work today that the government's minimum pension contribution requirement will be increasing in April, and so the % of my salary that I contribute will increase.

Currently it is part of my 'benefit' package that my employer pays double the % that I pay.
So currently I pay 2% and my employer pays 4%, making up 6% total.

In April when the minimum requirement increases to 8% I have been informed that as they are already contributing 4%, my contribution will have to be increased to 4%. Thus taking away the 'benefit' of them doubling my contribution.

Are they allowed to do this?

N/B The notification I have received is purely informing me that my contribution will be increased, they have omitted any info relating to the 'benefit' and/or its withdrawal.

JCS1

It was part of auto-enrolment that the percentages contributed would increase each year. Below gives the minimum that employee and employer have to contribute.


The table indicates that the employee minimum is 5% from April, so may be worth double checking the figures you were given



https://www.nowpensions.com/help-centre/faqs/contributions/what-are-auto-enrolment-contribution-rates

AmyLou125

So by the look of it I've not been meeting the minimum requirement since April 2018?
What would the implications of that be?

molerat

If the employer is paying over the minimum then as long as the total equals the minimum then the employee can contribute a lower amount.

hyubh

AmyLou125 wrote: »

Currently it is part of my 'benefit' package that my employer pays double the % that I pay.

I would be very surprised if this was open-ended however, i.e., you pay whatever you want, and within statutory limits, the employer will pay double - as opposed to, you pay whatever you want, and up to x%, the employer will pay double. What was the actual wording...?

In April when the minimum requirement increases to 8% I have been informed that as they are already contributing 4%, my contribution will have to be increased to 4%. Thus taking away the 'benefit' of them doubling my contribution.

If it was always 'we will pay double an employee contribution, paying up to 4%', then to be honest, it wasn't much of a benefit. So it goes back to the actual wording...

Dox

AmyLou125 wrote: »

In April when the minimum requirement increases to 8% I have been informed that as they are already contributing 4%, my contribution will have to be increased to 4%. Thus taking away the 'benefit' of them doubling my contribution.

Not sure what your beef is. The 'benefit' is the amount of cash going into your pension. If you contribute more, that's more money for you in later life.

gettingtheresometime

Dox wrote: »

Not sure what your beef is. The 'benefit' is the amount of cash going into your pension. If you contribute more, that's more money for you in later life.

I think the OP is querying whether if their contract states the employer pays twice the employee contribution when the minimum employee contribution increases shouldn't the employer contribution increase also

jobbingmusician

What does your contract actually say?

Savvy_Sue

When we first introduced a pension, before AE, we matched up to 2%. Then, when AE came in and the minimum from employees was 2%, we said we'd match up to 3%, so we were more than meeting the statutory minimum. When employee minimum became 3%, we did not increase what we would match to, so everyone's had 6% going in instead of 5%.

Following the April increase, once again we're not increasing the match, so everyone will be putting in the stat min of 7%, 4% from E'ees and 3% from employer.

So, what does the contract say? If you're not happy, this is something to take up with your union / others affected, but I wouldn't hold your breath.