It is just over five years since the first employers started to automatically enrol eligible workers into a qualifying pension scheme. Research has shown that this policy has generally been a success. However, it is also acknowledged that a key test will be how the picture develops as the minimum contribution levels are increased.
The first such increase takes effect from 6 April 2018. If they have not done so already, employers should consider what steps need to be taken to ensure that the statutory increases are implemented.
What are the increases?
The current minimum 1% employer and 2% overall contribution rates for defined contribution schemes which meet the quality standards for auto-enrolment are set to increase:
What action needs to be taken?
- Check whether a rule amendment is required
The scheme rules will need to be reviewed to check that they provide for contribution rates to rise in line with the current statutory timetable. If they do not, a rule amendment may be required.
