Pension reforms - Are you ready? Part 4

02 April 2015

The statutory regime covering workplace pensions will be transformed in April 2015. This is the culmination of sweeping reforms to defined contribution (DC) pensions aimed at providing savers with flexible access to their pension savings and changes to the DC governance and charges regime.




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In this final alert in our four-part series on the reforms, our pensions experts take a closer look at the implications for workplace pension reform.

Workplace pension reform

Technical amendments and changes to thresholds and limits

Three technical changes were made to the automatic enrolment regime on 1 April 2015:

  1. there will be a new way to satisfy the 'quality requirement' for defined benefit (DB) schemes;
  2. some employees may no longer need to be subject to the auto-enrolment regime (if the employer so chooses); and
  3. simplifications regarding what an employer needs to tell an employee about automatic enrolment are being introduced.

To discuss these changes and consider if they will be relevant to your approach to workplace pension reform (WPR), please contact a member of the Pensions team.

In addition, some of the thresholds and limits used to determine worker status and contribution levels will change. With effect from 6 April 2015, the WPR threshold and limits will be amended as follows:

  • automatic enrolment earnings trigger - £10,000 (unchanged from the 2014/15 figure);
  • lower limit of the qualifying earnings band - £5,824 (up by £52 from the 2014/15 figure); and
  • upper limit of the qualifying earnings band - £42,385 (up by £520 from the 2014/15 figure).

This means that the qualifying earnings band continues to be linked to National Insurance contribution thresholds.

The automatic enrolment earnings threshold will, however, no longer be linked to the personal allowance for income tax (the personal allowance for income tax will rise to £10,600 on 6 April 2015).


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