Employee contributions are based on tiered bands based on the individuals actual pensionable pay.
As a Scheme employer you are responsible for deciding what tiered contribution rate should be deducted for each member and each employment. This responsibility should be undertaken in a reasonable and consistent manner.
You must review the appropriate band and rate each April and you may also review the band again on any material change.
Your employer’s responsibilities in full are to ensure:
- The correct employee contribution rate is used.
- The correct employer contribution rate is used, which often changes each April.
- Pension contributions are collected on actual pensionable pay.
- Additional pension contributions are collected and paid over to the right organisation.
- Employees have the option to pay contributions for periods of absence or parental leave (maternity, adoption or paternity).
- Pension contributions are paid to the Pension Fund as soon as possible after collection and should be credited to the Fund no later than 19th of the month following deduction.
Example wording of Employer notification of employee contribution rate may help when communicating to your employees.