In 2017, over 7 million eligible private sector employees saving into a workplace pension received an employer contribution of two per cent or above (above the then minimum contribution rate); of these, 5.5 million received an employer contribution of four per cent or above. More than 92 per cent of eligible employees in the private sector contributing between three and four per cent received a matching (or higher) employer contribution rate. Approximately 5.9 million eligible employees were already meeting the April 2019 minimum contribution rates, based on data from April 2017. However, around 5.1 million eligible employees were still contributing below April 2018 minimums at that time, and around 6.1 million will have to increase their contributions by April 2019, if not earlier. The rate of levelling down (reducing the generosity of contributions or outcomes for existing pension scheme members) has increased slightly since 2012. However, findings from the Employers' Pension Provision Survey 2017 suggest that where employers have experienced increased contribution costs as a result of automatic enrolment, only one per cent of employers have adopted levelling down as a strategy to absorb increased contribution costs. Next Steps The latest evidence shows that automatic enrolment remains on track, with millions more employees enrolled into private pension saving in the UK. The staging of employers has completed, and evidence to date from the first contribution increase suggests consistent saving behaviours from prior to the increase. The next evaluation report will set out further evidence from the first contribution increase and findings from the second increase in April 2019. Following the completion of the second increase, automatic enrolment will move from implementation of the reforms to steady state.
The next evaluation report will review progress to date since implementation started in 2012, and update on future evaluation reporting plans for steady state.
The full report is available here - Automatic enrolment evaluation report 2018
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Have you communicated auto enrolment changes? 11 January 2019
The minimum contributions you and your staff pay into your automatic enrolment workplace pension scheme will increase from 6 April 2019. Are you ready for the change?
The automatic enrolment duties were staged in between October 2012 and February 2018 by employer size, starting with the largest employers. Since October 2017, all businesses employing someone for the very first time have to provide a workplace pension from the first day of their service. In 2018, the first of two planned minimum contribution increases was implemented. Before April 2018, total minimum contributions were 2% of a band of workers’ earnings, of which at least 1% came from the employer. This rose to 5% in April 2018, of which at least 2% must come from the employer.
On 6 April 2019, the amount that will need to be paid into a workplace pension will increase to an overall minimum of 8%, with employers contributing at least 3% of this.
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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