Thursday 18th October 2018

'Few' members leaving schemes after contribution increases

Article By Dave Morman

Over 90% of small and micro employers said no members asked to leave their pension scheme following the increase of minimum auto-enrolment contributions in April 2018, The Pensions Regulator (TPR) has revealed.

In its Ongoing Duties Survey – Summer 2018 published on 11 October 2018, TPR found that just 2% of micro employers had one or more members who asked to leave, while the number rose to 5% for small businesses and 17% for medium size businesses.

In April, pension contributions rose from 2% to 5%, and are set to increase again to 8% from 06 April 2019.

The cessation rate – the mean proportion of members that asked to leave the scheme – was 1.8% for micro employers, 1.7% for small employers and 0.9% for medium employers.

Furthermore, members who asked to remain in the scheme, but not pay the increased contribution levels, were also small, with just 1% among micro schemes, 1% of small and 2% of medium employers reporting this had happened.

Four out of nine schemes were able to keep the employees’ contribution levels to below the pre- 06 April 2018 level.

The research, which surveyed 300 micro employers, 300 small employers and 200 medium employers, was aimed at tracking employers awareness around their on-going automatic enrolment, re-enrolment duties.

Commenting on the findings, TPR director of auto-enrolment, Darren Ryder, said: “It’s great news that employers are continuing to find their ongoing duties quick and easy to do, staff are saving more and we are continuing to build on the success of automatic enrolment.”

Brunsdon Employee Benefits Ltd specialises in auto-enrolment and can provide a complete end-to-end solution or help with the administration burden. Please contact us if you require further information.

Source:

http://moneyage.co.uk/Few-members-leaving-schemes-after-contribution-increases-TPR.php

This article is for information only and does not constitute advice. The information provided regarding automatic enrolment and pension legislation is based on our understanding of current UK pension legislation law, tax law and HM Revenue and Customs practice, all of which may be subject to change and your business circumstances may impact on these. Brunsdon is not responsible for the content of third party web sites.