The document discusses auto enrolment minimum contribution increases, known as phasing. It provides an overview of the phasing stages, which will increase total minimum contributions to 8% by 2019. Employers must ensure payroll software and pension schemes support the increased rates. Best practice is to inform employees of the increases to minimize confusion. The BrightPay software can automatically calculate and implement the phased increases for employers.

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Auto Enrolment: Understanding Increased
Minimum Contributions & its Implications
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Auto Enrolment &
Minimum Contribution
Increases (Phasing)
By Rachel Hynes
Marketing Executive
at BrightPay
Webinar Agenda
An overview of
phasing
Who does
phasing apply
to?
Are employers
ready for
contribution
increases?
Informing staff
about the
increases
How will phasing
affect new
employers?
Implementing
the increases in
BrightPay
A quick peek at
BrightPay
Connect
-
Q&A Session
Questions Tab or #BPWebinars
Q&A
On Demand
This session is being recorded
REC

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-An Overview of Phasing
An Overview of Phasing
• There are two stages to the increase in minimum contributions,
which has been described as phasing
Total must be at least
(% of qualifying earnings)
Employer must contribute
(% of qualifying earnings)
October 2012 to 5 April 2018 2% 1%
6 April 2018 to 5 April 2019 5% 2%
6 April 2019 onwards 8% 3%
An Overview of Phasing
• Employers can choose to contribute more than the minimum
contribution if they wish
• Employees must contribute the remainder to make up the total
minimum contribution
• Employer can choose to pay total minimum contribution,
i.e. no employee contribution
An Overview of Phasing
• Salary sacrifice agreements - employees’ contracts of
employment may need to be reviewed and amended as a result
of phasing
• Example: Employees’ current contract of employment states that
they will sacrifice 1% of their salary in return for the employer to
pay the equivalent amount into the pension scheme along with
their own 1% employer contribution

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-Who does phasing apply to?
Who does phasing apply to?
• The Pensions Regulator is sending letters to all employers
informing them about the increases
• Phasing will apply to all employers who have staff enrolled into a
workplace pension scheme
• For employers who don’t have staff enrolled then they do not
need to take any further action
Who does phasing apply to?
• Employers must continue to assess their employees on an
ongoing basis
• If an employee becomes eligible to be automatically enrolled,
the minimum contributions at that current time period must be
applied
• New employers are required to comply with the total minimum
contribution rate at that time
-
Are employers ready for
contribution increases?

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Are employers ready for the increase?
• Employers will need to understand and plan ahead for the
increases in April 2018 and April 2019
• Check with your current payroll software provider to ensure it
will handle and calculate the increased contribution amounts
from 6th April 2018
• HMRC’s Basic PAYE Tools does not cater for auto enrolment
Ensure the correct contributions are deducted
• Employers must know when and how much to deduct when
both sets of increases come into effect
• Payroll software should automatically prompt you when the
increases need to be implemented
• Take steps to ensure that the increases have been put in place
correctly
Ensure the pension scheme is qualifying
• Pension providers have already begun to take steps to allow for
the increases
• If your current scheme doesn’t support the increased
contributions, you should speak to your pension provider to
allow the new increased rates
-Informing staff about the increases

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Informing staff about the increases
• Some pension providers are communicating the increases to
their customers and their members
• Contact your pension provider to find out what kind of support
they are offering to inform staff about the increases
Informing staff about the increases
• It is not a mandatory requirement to inform or write to staff
about the increases in minimum contributions
• Best practice would be to clearly communicate with employees
to let them know before the increase takes place
• This will help minimise confusion and reduce queries
• TPR has a sample letter template available to employers
-Implementing the increases in BrightPay
Implementing the increases in BrightPay
• Payroll software should easily and automatically calculate the
phased increases for you
• Check that your chosen pension scheme and payroll software can
support the phased minimum rates
• If you are an accountant, it will be your responsibility to make
sure that the correct amount of pension contributions are being
deducted and to inform your clients about these increases

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Implementing the increases in BrightPay
• If your payroll provider is not prepared for the increases, the
correct amount may not be paid to the workplace pension
scheme on time
• Any delay in implementing the minimum contribution increases
could result in non-compliance fines
• BrightPay can automate and calculate the increases in minimum
contributions for you

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-A quick peek at BrightPay Connect

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