27 Mar 2012
The auto-enrolment earnings threshold figure and the lower and upper limits for the qualifying earnings band have been confirmed by the DWP.
The Auto Enrolment earnings trigger will be £8,105 with a lower limit for qualifying earnings of £5,564 and an upper limit of £42,475.
The earnings threshold is the same as the PAYE tax threshold whilst the lower and higher qualifying earnings limit are those used for National Insurance.
The fact that these figures have been aligned with the PAYE tax threshold and NI figures is good news on one hand because it keeps simple however, the higher qualifying earnings figures is greater than originally suggested meaning a potential increase in cost for Employers intending to use the qualifying earnings contribution basis.
What has not been clarified is how these figures will change in the future, for example when the NI upper limit is due to reduce to £41,450 in 2013/14 as announced in last week’s budget.
For most employers, whose staging dates are post April 2013 the actual contribution liability is still unknown although consideration should be being given to the potential contribution options.
For further information on the Workplace Pension Reforms and/or help with contribution modelling please contact us at 0844 406 0027 or at email@example.com .