FAQs for Employers

No. These grants are intended to support business and their employees by covering up to 80% of the costs of employment up to an overall cap of £2,500 for each employee (depending on the level of non-working hours). The grant covers wages, but employers must pay National Insurance contributions and the minimum employer pension contribution of 3% of qualifying wages required under automatic enrolment.

The scheme has been extended until September 2021.

From July 2020 furloughed workers have been able to return to work part-time with employers being asked to pay towards the salaries of their furloughed staff.

Salaries of all furloughed workers, full- and part-time, remain pensionable.

Will these cover amounts beyond the automatic enrolment minimum?

No. In the interests of simplicity, the government has aligned the grants with the 3% minimum contribution required by employers under automatic enrolment. If employers contribute above this amount and will continue to do this for furloughed staff, they won’t be able to claim for these additional contributions.

Some companies and organisations are carrying out their first re-enrolment of employees during the coronavirus pandemic.

The Pensions Regulator (TPR) will write to you with the relevant information explaining how to carry out your re-enrolment duties and complete your re-declaration of compliance. TPR recommends that you assess your staff for re-enrolment on the third anniversary of your staging date or duties start date.

If you have all the correct information handy, it can take as little as 15 minutes to complete the re-declaration. It’s important that you don’t miss the deadline. 

Please note, you can’t use postponement at re-enrolment. However, you can choose three months either side of your third-year anniversary date as your re-enrolment date. This may give you flexibility if the pandemic is making it difficult to complete your re-enrolment duties.

For example, if your staging date or duties start date was 1 September 2017, your re-enrolment date will be 1 November 2020. You can  choose to start your duties three  months before or after 1 November 2020.

You can check TPR’s re-enrolment date tool to see your available dates.

Yes. The government’s CJRS – also known as the furlough scheme – has been extended across the UK until 30 September 2021.

Employees will receive 80% of their current salary for the hours they don’t work, up to a maximum of £2,500 per month (depending on the level of non-working hours) up to 30 June 2021. As an employer, you’ll only have to pay National Insurance and pension contributions (although you can, if you want to, top your employees’ pay up to 100% at your own expense).

From 1 July 2021, employers are required to contribute 10% of the 80% (capped at £312.50 each month) with the government contributing 70% of the 80% (this is capped at £2,187.50 per month).

From 1 August 2021, until the scheme ends on 30 September 2021, employer contributions rise to 20% of the 80% (capped at £625 per month) with the government contributing 60% of the 80% (this is capped at £1,875 per month). We set this out in the table below.

Businesses can choose to bring furloughed employees back to work part-time or furlough them full-time.

Neither employers nor employees need to have previously used the CJRS in order to access the extended scheme.

Any employees who were made redundant after 23 September 2020 – when the Job Support Scheme (JSS) was announced – can be brought back on to the scheme.

The JSS, which was due to replace the CJRS on 1 November, has been postponed until the furlough scheme ends.

You can find out more about the changes to the scheme here.

The government is also offering free webinars to help employers understand updates to the CJRS.

If you’re still paying your employees, then you’re still required to make the deductions as normal. You must continue to pay your agreed levels of pension contributions ensuring they meet the statutory minimum of 8% contributions, paying at least 3% as an employer.

If you’re paying some staff, but not others, simply amend the relevant contribution amounts, gross pay and pensionable earnings columns to ‘0’ for those employees who haven’t been paid. Then upload the file as normal.

If you’re not paying any staff, please log on to Gateway and select the ‘Null submission’ option for the relevant payroll.

You should keep your Direct Debit active – there’s no need to cancel it.

No. If you’re paying employees, you must continue to make employer contributions at the agreed levels ensuring you meet the statutory minimums (3% for employers) and deduct employee contributions (5%) to meet the minimum requirement of 8%.

Where you’ve already paid staff and deducted contributions, you’ll need to continue to upload your pension data and allow the collection to be made.

Employees who are currently being paid under the Coronavirus Job Retention Scheme (CJRS) should receive statutory redundancy pay based on their normal wages, rather than the reduced furlough rate. The government introduced this legislation on 31 July 2020.

The regulations aim to ensure all furloughed employees who are being made redundant receive their full entitlement. They aren’t intended to affect any enhanced redundancy terms in an employee’s individual employment contract.

They also cover other employment rights that rely on average weekly pay, including those relating to notice pay, unfair dismissal, and short-time working.

The new Job Support Scheme (JSS) was due to replace the existing Coronavirus Job Retention Scheme (CRJS) when it ended on 31 October and run until the end of April 2021. It aims to protect ‘viable jobs’ and will see employees receive up to 77% of their usual salaries for six months.

As the CJRS has now been extended, the JSS is now on hold.

No. You mustn’t advise or encourage employees to opt out of your workplace pension scheme. This could be considered an inducement and would be a breach of your legal duties. We’re obliged to monitor this and report any such incidents to TPR.

Yes, we’re still required to report employers for failed payments. TPR will review all reports and will take a risk-based approach to any enforcement action. TPR has extended the period so that  reporting takes place once contributions are 150 days late rather than 90 days. However, the late reporting period will revert to 90 days again in early 2021.

It has stated. “We will take a proportionate and risk-based approach towards the enforcement of decisions, in light of these challenging times, with the aim of helping to get employers back on track and supporting both employers and savers.”

Where staff are being paid normal pension deductions still apply. This includes both employee and employer contributions.

Yes. Automatic enrolment legislation requires Statutory Sick Pay (SSP) to be treated as part of qualifying earnings.

During sick leave, pension contributions paid by both employers and employees are based on the employee’s actual earnings. 

So unless the contract of employment or the workplace pension scheme rules offer more generous terms, both employer and employee contributions will decrease if sick pay is less than normal pay. 

Yes, TPR has advised that all usual pension contribution deductions apply – even if you’re using grants to pay to keep staff on payroll. This includes paying the agreed levels of pension contributions, including meeting the statutory minimums for pension contributions, paying at least 3% as an employer.

You can also choose to top this up to cover your employees’ contributions or deduct this from salaries as normal.

From July 2020 furloughed workers have been able to return to work part-time with employers being asked to contribute towards the salaries of their furloughed staff.

Salaries of all furloughed workers, full- and part-time, remain pensionable.

Some employers and employees choose to pay their workplace pension contributions through a salary sacrifice agreement. This means the employee gives up part of their salary (their sacrifice), which the employer pays into their pension, along with their contribution.  The employees’ original salary is known as the ‘pre-sacrifice salary’ and their reduced salary after sacrifice as their ‘post-sacrifice salary’.

Please note that the 80% of pay available to the employer under the Coronavirus Job Retention Scheme is calculated based on employees’ post-sacrifice salary.

Pension obligations remain in place

The grant available under the scheme does not change employer’s usual pension contribution payment obligations or processes.

Employers must continue to pay the total pension contribution, comprising both their normal pension contribution and the additional pension contribution arising from the salary sacrifice.

Unfortunately, this means that in the case of salary sacrifice schemes the grant received from the government under the Coronavirus Job Retention Scheme will not cover the full cost of the employer’s pension contribution, even where salaries have been reduced to 80%.

The government is aware of this and has stated that while the grant aims to help employers, it may not cover all the costs of associated benefits in an employee’s remuneration package.

When calculating the pension contribution due for a furloughed worker who has agreed a salary sacrifice arrangement, any contractual obligations, as well as pension obligations under Scheme rules apply as normal.

You can’t ask your employees to temporarily suspend any pension contributions and the statutory minimums still apply.  If you usually pay above the statutory minimums and need to reduce the amount you pay, you’ll need to contact us to update your participation agreement.

Changes in pension benefits apply to all staff – furloughed and non-furloughed

You’ll also need to obtain agreement about any reductions from your employees. Changes in pension benefits apply to all staff, not just those who’ve been furloughed. You should take advice about whether any proposed changes to pension contributions affect your contractual obligations to your employees.

If an employee ceases to participate in a salary sacrifice arrangement, you will need to maintain their auto enrolment membership and ensure contributions are now deducted from their furloughed pay as per the auto-enrolment minimum contributions.  

You can find out more about how salary sacrifice agreements work for furloughed employees from The Pensions Regulator.

Yes. The Coronavirus Job Retention Scheme (CRJS) has made it possible for employers to bring furloughed employees back part-time since 1 July 2020.

Organisations are responsible for paying wages, National Insurance Contributions (NICs) and minimum pension contributions for these employees in line with the hours they work.

The government will continue to pay a proportion of the wage costs for the hours which aren’t worked, up to the existing cap of £2,500, (depending on the level of non-working hours), in line with the CJRS.

Yes. The economic impact of the COVID-19 pandemic caused the Diversified Growth Fund’s value to fall by 11% in March 2020. As a result, its performance up until 31 March 2020 was negative. This is reflected in employees’ benefit statement for the 2019-2020 Scheme year.

However, the fund’s value has recovered since the end of March 2020. You can see the latest fund prices here.

Members can ask to stop their pension payments (cease contributions) and leave active membership at any time. If they do, you’ll stop contributing for them at the same time.

Members who choose this option must be automatically re-enrolled at your next re-enrolment date, if they continue to meet the eligibility criteria. Re-enrolment occurs once every three years, based on your staging or duties start date.

However, these members can also choose to rejoin the Scheme at any time.

No. Please keep your Direct Debit active – there’s no need to cancel it.

If you’re paying some staff, but not others, simply amend the relevant contribution amounts, gross pay and pensionable earnings columns to ‘0’ for those employees who haven’t been paid, then upload the file as normal.

If you’re not paying anyone, please log on to Gateway and select the ‘Null submission’ option for the relevant payroll.

You should keep your Direct Debit active – there’s no need to cancel it.

If you’re paying some staff, but not others, simply amend the relevant contribution amounts, gross pay and pensionable earnings columns to ‘0’ for those employees who haven’t been paid, then upload the file as normal.

If you’re not paying any staff, please log on to Gateway and select the ‘Null submission’ option for the relevant payroll.

The Pensions Regulator (TPR) has been explicit that it expects employers to continue making contributions to workplace pension schemes.  If you’re having difficulty paying your pension contributions, you need to consider when you’ll be able to make up any missed payments and, if necessary, contact us to agree a payment plan to bring your contributions up to date.