Employers have been encouraged to check they have the right processes in place before the auto-enrolment minimum contribution rate rise on 6 April 2019.
As of next April, minimum contribution rates will stand at three per cent for employers, four per cent for employees and one per cent in tax-relief – making an eight per cent total contribution.
Writing for Lexology, Gavin Ellison, managing associate at Womble Bond Dickinson, explained that employers need to consider whether contribution rates for their DC qualifying schemes need to change and whether they need to consult and/or agree contractual changes with affected members.
“As well as identifying which employees and schemes will be affected, employers should consider whether minimum contribution rates are currently entrenched in the governing provisions of their scheme and whether amendments are needed to bring the governing provisions in line with the statutory minimum requirements,” said Ellison.
“Employers may also need to take legal advice on the current position on minimum contributions in employment contracts and whether changes need to be made to such terms.”
