minimum workplace pension contributions

nessierob

https://forums.moneysavingexpert.com/discussion/comment/82175073#Comment_82175073

this question has nothing to do with tax or how much you can put in in a year it is to do with how low an employer can base contributions on and how its being allowed

Marcon

https://forums.moneysavingexpert.com/discussion/comment/82175061#Comment_82175061

I think you've posted this on the wrong thread - but since you ask, I'm happy to reiterate the point I made: HMRC places limits on tax-relievable pension contributions. Please have a look at the link I have already provided - or you might find this easier to digest: https://www.aviva.co.uk/retirement/pension-basics/pension-tax-relief/

Veloflyer

https://forums.moneysavingexpert.com/discussion/comment/82175073#Comment_82175073

I get the limits - but they would still get tax relief?

Marcon

https://forums.moneysavingexpert.com/discussion/comment/82175084#Comment_82175084

Only up to the limits applying to them.

nessierob

https://forums.moneysavingexpert.com/discussion/comment/82174786#Comment_82174786

its what the employer has to contribute is the issue

Marcon

https://forums.moneysavingexpert.com/discussion/comment/82175121#Comment_82175121

Please could you be more explicit about your concerns over what your employer is contributing - or of course you could complain to the Pensions Regulator if you think your employer is not complying with auto enrolment legislation.

nessierob

https://forums.moneysavingexpert.com/discussion/comment/82175134#Comment_82175134

please read what i have replied to , the standard contribution is 8% of qualifying earnings but they are allowed to use the alternative quality requirements set 1 set and set 3 , set 1 says 9% of basic pay . this is said in all guidance but set 1 is not just 9% of basic pay there is an upper limit rule which cannot the contributions to below the relevant quality requirement which is 8% of qualifying earnings . in the DWP guidance 4.5 in applying the rules it says this either as a footnote at the back of the guidance or in tiny small print so its easy to miss

this is from section 32e of the occupational and personal pensions act(automatic enrolement) the legislation

the issues i am having is the DWP and the TRP will not answer what this means , even thou the pre 2012 guidance made all of it very clear it said " with large amounts of un pensionable pay the minimum requirements may not be met" as if you earn £26420 you remove the lower threshold of £6240 and contribute 8% of £20000 so contribute a combined figure of £1600 if you still earnt £26420 but you basic pay was for example £10000 the contribution would be £900 combined

the aqr rules in set 1 say in the proviso must not bring the contributions to below the RQR

but this is happening and being allowed , the DWP /TPR wont answer the question and this could affect possibly 4% of the workforce , no one is questioning it and the DWP say i should employ a pensions barrister to persue it

it does not affect me i am retired but it does the 30 members of staff where i worked who have no idea how bad the workplace pension will be when they retire , they get far less than someone on minimum wage even if some of them earn £50000 a year

Marcon

please read what i have replied to , the standard contribution is 8% of qualifying earnings but they are allowed to use the alternative quality requirements set 1 set and set 3 , set 1 says 9% of basic pay . this is said in all guidance but set 1 is not just 9% of basic pay there is an upper limit rule which cannot the contributions to below the relevant quality requirement which is 8% of qualifying earnings . in the DWP guidance 4.5 in applying the rules it says this either as a footnote at the back of the guidance or in tiny small print so its easy to miss

I've read what you've said, but to be honest it's extremely hard to follow your argument - and pre-2012 guidance is way out of date if you're trying to rely on that.

it does not affect me i am retired but it does the 30 members of staff where i worked who have no idea how bad the workplace pension will be when they retire , they get far less than someone on minimum wage even if some of them earn £50000 a year

It's genuinely laudable that you are concerned for your former colleagues, but they are the ones who need to pursue any concerns that their employer is not complying with all relevant legislation. If they can't be bothered to do so, or even make sufficient effort to check what sort of pension they are building up, then that's down to them.

Nobody here has seen the details of the scheme in question, and in particular the certification basis used by the employer, so the reality is that you are unlikely to get any truly useful input - unless @hugheskevi feels like responding? He is probably the only person posting on this forum with sufficiently detailed knowledge of the areas of legislation to do so with any authority, but of course may prefer not to comment.

DRS1

Note 6 reads as follows

"Under set 1 the pensionable earnings of the jobholder must be equal to or more than that jobholder’s basic pay (except where there is an upper limit to contributions, but contributions made to jobholders affected by the upper limit satisfy the quality requirements under the Act)."

I do not find it easy to follow but I think it is saying the link of 9% to basic pay cannot make the employer pay more than it would otherwise be required to pay under the 8% of qualifying earnings requirement.

nessierob

https://forums.moneysavingexpert.com/discussion/comment/82175175#Comment_82175175

yes with a cap it cant be less than the maximum under qualifying earnings if the earnings allow it but also not less than the minimum the relevant quality requirement allows 8% of qualifying earnings