Managing contributions

It’s important that you and your employees know exactly what you’re expected to pay and when.

We set out the rules and explain how to manage the process each month so you can keep on top of contributions – and meet your auto enrolment obligations.

The minimum contribution rate

This is currently 8% of qualifying earnings.

  • Employers pay at least 3%
  • Employees (members) pay 5%

This rate is set by the government and enforced by The Pensions Regulator. Employers and employees can pay more than these percentages if they choose to.

 

Setting up minimum contributions

You’ll need to choose our contribution model (Scheme tier) 101 to set up minimum contributions for your workplace pension.

What is a contribution model?

Deducting contributions

All pension contributions – employer and employee – are made through your payroll. You deduct the contribution from employees’ pay and upload details of the contributions, together with your employer contributions, to our system. We then collect all the contributions by Direct Debit.

Our Scheme uses a net pay arrangement for tax relief – pension contributions come out of employees’ pay before tax is taken off.

Contribution deadlines

There are statutory deadlines for paying contributions to us. You need to make sure pension contributions can be collected by the 22nd of the month after the deductions were made. This means you need to have uploaded the contribution details to us as soon as possible after payroll has completed, and made sure your Direct Debit Instruction is up to date.

Keeping on top of collecting and managing your contribution payments will ensure money is credited to members’ pension savings promptly.

 

Late contributions and The Pensions Regulator (TPR)

TPR is interested in all employers who pay contributions late. We’re legally obliged to monitor your contribution payments and report to TPR if contributions are more than 90 days late (or there’s some other significant payment failure). We also have to tell your employees.