Corporate Adviser
  • Content Hubs
  • Magazine
  • Alerts
  • Events
  • Video
    • Master Trust Conference 2024 videos
  • Research & Guides
  • About
  • Contact
  • Home
  • News
  • In Depth
  • Profile
  • Pensions
    • Auto-enrolment
    • DB
    • DC
    • Defaults
    • Investment
    • Master Trusts
    • Sipps & SSAS
    • Taxation
  • Group Risk
    • Group Life
    • Group IP
    • Group CIC
    • Mental Health
    • Rehab
    • Wellbeing
  • Healthcare
    • Musculoskeletal
    • Mental Health
    • IPT
    • Wellbeing
    • Trusts
    • Cash Plans
  • Wellbeing
    • Mental Health
    • Health & Wellbeing
    • Financial resilience
  • ESG
No Result
View All Result
Corporate Adviser
No Result
View All Result

Govt to pay employer AE contributions during Covid crisis

by Emma Simon
March 27, 2020
pandemic
Share on FacebookShare on TwitterShare on LinkedInShare on Pinterest

The Government will cover employer contributions into AE pensions if businesses have to furlough staff, according to a statement by the Department of Work and Pensions.

The DWP confirmed firms claiming grants under the job retention scheme will get an additional allowance to cover their minimum AE contributions. They will also get additional help to ensure employer national insurance continues to be paid.

However these payments will be based on the lower furloughed wage.

The DWP said this would offer businesses hit by the Covid-19 shutdown support, without them needed to suspend AE plans which would have a detrimental impact on their employees’ financial future. 

Aegon pensions director Steven Cameron says: “We welcome the confirmation that the grants businesses can claim for furloughed employees will include an allowance for the 3 per cent minimum employer auto-enrolment contributions, as well as employer NI liabilities of up to £2,500 a month.

“This will alleviate any pressure to suspend auto-enrolment contributions which even for a short period might have undermined the huge success of auto-enrolment to date. Importantly, it also avoids affecting individuals’ longer term finances.”

Cavendish Ware associate director Roy McLoughlin adds: “In these uncertain times it is vital to try and keep valuable benefits running as close to normal.

“Whilst we would call upon the regulator to look at more flexibility in terms of SME pension arrangements this news is extremely welcome. Employers are quite rightly pointing out the flexibility that is being offered in so many other areas of trading but there seems to be frustration that prior too this pensions seem to have been left in the dark.”

Individuals will be expected to pay their minimum contributions from ongoing pay and while they can opt out, this would mean they lose valuable employer contributions – which are now being subsidised by the Government. 

Cameron added: “While employers paying above the minimum will not be able to claim back these additional amounts, including the auto-enrolment minimum in job retention grants is a very welcome demonstration of the importance the Government places on ongoing retirement savings.”

VIDEO FROM ROYAL LONDON


Find out more about how to support the switching of a workplace pension

Corporate Adviser Special Report

REQUEST YOUR COPY

Most Popular

  • SPP warns against salary sacrifice reforms amid strong employer support for current system

  • Jo Sharples profile: Happy returns for Aon

  • NatWest Cushon spells out path to £25bn

  • Consultants escape regulation but providers face new disclosure hurdles: Pension Investment Review

  • Barnett Waddingham appoints five new partners amid raft of promotions

  • Consultants welcome new Pension Schemes Bill

Corporate Adviser

© 2017-2024 Definite Article Media Limited. Design by 71 Media Limited.

  • About
  • Advertise
  • Privacy policy
  • T&Cs
  • Contact

Follow Us

X
No Result
View All Result
  • Home
  • News
  • In Depth
  • Profile
  • Pensions
    • Auto-enrolment
    • DB
    • DC
    • Defaults
    • Investment
    • Master Trusts
    • Sipps & SSAS
    • Taxation
  • Group Risk
    • Group Life
    • Group IP
    • Group CIC
    • Mental Health
    • Rehab
    • Wellbeing
  • Healthcare
    • Musculoskeletal
    • Mental Health
    • IPT
    • Wellbeing
    • Trusts
    • Cash Plans
  • Wellbeing
    • Mental Health
    • Health & Wellbeing
    • Financial resilience
  • ESG

No Result
View All Result
  • Home
  • News
  • In Depth
  • Profile
  • Pensions
    • Auto-enrolment
    • DB
    • DC
    • Defaults
    • Investment
    • Master Trusts
    • Sipps & SSAS
    • Taxation
  • Group Risk
    • Group Life
    • Group IP
    • Group CIC
    • Mental Health
    • Rehab
    • Wellbeing
  • Healthcare
    • Musculoskeletal
    • Mental Health
    • IPT
    • Wellbeing
    • Trusts
    • Cash Plans
  • Wellbeing
    • Mental Health
    • Health & Wellbeing
    • Financial resilience
  • ESG

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.