The BVRLA is encouraging members to prepare for legislation changes taking effect on 6 April 2018, that will require all employers to increase the minimum contribution from the current level of 2% of qualifying earnings to 5%.
Employers will be required to increase their contributions to at least 2% and their staff’s contribution will also be increased so that their contributions make up the shortfall needed to bring the total minimum contribution up to 5%.
Both the employer and staff member have the choice to contribute greater amounts to the pension if they wish. If the employer decides to contribute more than their required minimum amount, but less than the total minimum amount, then the staff member will only need to make up the shortfall between the total minimum and the employer contribution.
On 6 April 2019 the contribution levels further increase, where the employer will be required to pay a minimum of 3% with the total minimum contributions needing to reach 8%. The employer’s staff must then make up the 5% difference.
The Pensions Regulator has online information and guidance that will help you including template letters to help you explain the increases to your staff.