Are you deducting the right contributions?
For action
On 1 April 2019 the new contribution rates came into effect. In your April payroll you will need to make deductions at the new contribution rates. Employer contributions to the match cease even when member contributions continue.
Please continue to run the Additional contributions report to pick up changes members make to their additional contributions.
The match
Many members elected to cancel their match contribution altogether. We introduced the facility for them to do that in advance, to make March their last match contribution, and introduced the March cancellation report so that you would know which members had taken that option. The cancellation report also included any other requests to change additional contributions made by the member at the same time as they cancelled their match contribution.
The March cancellation report will remain available on the employer portal until October 2019, please make sure that you run this report before your April payroll to make any changes to match contributions, or other additional contributions, requested by your members.
Contribution rates
On 30 January 2019 we sent all employers full details of the changes, including the contributions rates. On 1 April 2019, the first of the phased increases to contributions was implemented. The remaining increases are due on 1 October 2019 and 1 April 2020.
| Effective date |
Employer contribution rate |
Member contribution rate |
Other |
| 1 April 2019 |
19.5% |
8.8% |
Employer match contribution reduces to 0% |
| 1 October 2019 |
22.5% |
10.4% |
|
| 1 April 2020* |
24.2% |
11.4% |
|
Subject to the outcomes of the 2018 valuation, and when it is completed, there may be implications for the implementation of the later phases of contribution rate increases outlined above.
Contributions interface
That email also included the updated guidance for completing the contributions interface with the new rates. An updated interface template, along with worked examples went live on the STU upload page on 10 April 2019 for those of you that manually complete the interfaces. Please make sure that you are using the latest version of the templates. You’ll also find worked examples of how to complete the interfaces in a variety of scenarios, including backdated pay awards.
Preparation
Members of the Client Engagement team have been in touch with every employer to see how you’re getting on preparing for the changes.
All of our member information online has been updated to reflect the changes.
If you have any queries or concerns please do let us know by contacting the Client Engagement team.