The Coronavirus Job Retention Scheme (CJRS) was introduced by the Government for staff furloughed on or before 10 June 2020. Although many things have changed due to the current circumstances, there is still a responsibility for employers to carry on funding both automatic enrolment (AE) and AE qualifying pension schemes by the statutory minimum amount and for employees to continue to make contributions to their workplace pension scheme if they wish to remain enrolled.
If you have been furloughed the following is a summary of how you will be paid and how workplace pension contributions and National Insurance contributions will apply under the CJRS.
The CJRS will apply to you if you are paid a fixed, full or part-time salary; furlough pay is based on what you earned during the last pay period before 19 March 2020 and applies to anyone who was on their employer’s payroll on or before 19 March 2020. It will continue in its current form until the end of July, with more changes introduced from the start of August. The Scheme will close at the end of October.
Initially your employer received a grant for 80% of your monthly earnings or £2,500 a month whichever is lower. Any fees, commissions and bonuses which you may have received or have been entitled to prior to being furloughed are not included. Your employer is required to pass on the full amount of the grant they receive to you less normal payroll deductions (i.e. employee national insurance, income tax and pension contributions).
The payment from the Government initially included your employer’s National Insurance Contributions and minimum automatic enrolment employer pension contributions on the earnings.
In June and July the Government will pay 80% of your wages up to a cap of £2,500 as well as employer National Insurance and pension contributions.
From 1 July 2020, anyone on furlough under the CJRS may work part of the time for their employer.
From August 2020 the level of Government grant provided through the job retention scheme will be slowly tapered to reflect that people will be returning to work. The Government will pay 80% of your wages up to a cap of £2,500. Employers will pay employer National Insurance and pension contributions (employers will no longer be able to claim a grant for the statutory minimum AE employer contribution).
In September the Government will pay 70% of your wages up to a cap of £2,187.50. Employers will pay employer National Insurance and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500.
From 1st October the Government will pay 60% of your wages up to a cap of £1,875. Employers will pay employer National Insurance and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500.
Workplace Pension Schemes - Automatic Enrolment
An employer’s AE duties will continue to apply as normal, for everyone who is still working as well as staff furloughed as part of the CJRS.
Requests to join a pension scheme
Any furloughed member of staff can ask their employer to join the workplace pension scheme at any time including during the furlough period. You should apply in writing, and your employer must put you into the pension scheme within a month of receiving your request.
Your employer will have to make pension contributions into your pension pot if you are aged 16-74 and earn at least £520 a month or £120 per week.
Who should I contact if I have any questions?
Your first point of contact is your payroll department who should be able to provide answers to any questions you have.