It is important to consider pension contributions when looking at the grant available under the Coronavirus Job Retention Scheme as this does not change an employer’s usual pension contribution payment obligations or processes.
Within this article we look at important points to consider with regard to the retention scheme and existing salary sacrifice agreements and employer consultation if an employer would like to make a change to the existing pension provision.
Key facts
- The requirement under workplace pensions legislation to consult on certain changes only applies if an employer has at least 50 employees
- A salary sacrifice arrangement for pension contributions is separate from the automatic enrolment provisions and pension contribution obligations set out in a pension scheme’s rules or governing documentation
- The existence of the grant available under the Coronavirus Job Retention Scheme does not change an employer’s usual pension contribution payment obligations or processes
- The salary for calculating the grant should not include the cost of non-monetary benefits provided to employees, including taxable benefits in kind
- Benefits provided through salary sacrifice schemes, including pension contributions, that reduce an employee’s taxable pay should not be included in the reference salary
- Benefits provided through salary sacrifice schemes, including pension contributions, that reduce an employee’s taxable pay should not be included in the reference salary
Calculating salary sacrifice pension contributions for furloughed workers
Employer consultation requirements
What if the employer’s pension scheme operates on a salary exchange basis?
Pensionable pay
Life events
Working part-time while on furlough from 1 July 2020
Note
The information provided is based on our current understanding of the relevant legislation and regulations and may be subject to alteration as a result of changes in legislation or practice. Also it may not reflect the options available under a specific product which may not be as wide as legislations and regulations allow.
All references to taxation are based on our understanding of current taxation law and practice and may be affected by future changes in legislation and the individual circumstances of the investor.
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