Help / Advice with WPP and pay awards

RE: Help / Advice with WPP and pay awards

Peter Faulkner — Tue, 27 Mar 2018 21:00:17 GMT

[quote user="Martin Atkinson"]

When I informed my staff about the workplace pension scheme they were told that the first 1% was on me but when the the automatic increases came into play in subsequent years that any additional contribution I was required to make would be in lieu in part at least of any potential pay rises. This is documented in an appendix to their contracts of employment. Given the stagnation in practice income over the past 12 months it is unlikely they will get any additional pay rise.[/quote]

Thanks Martin, that is fair. I was thinking of doing the same, they only started in October 2017. Good idea to document and add your policy to their contracts.

RE: Help / Advice with WPP and pay awards

Martin Atkinson — Tue, 27 Mar 2018 17:23:12 GMT

RE: Help / Advice with WPP and pay awards

Peter Faulkner — Sun, 25 Mar 2018 20:21:09 GMT

[quote user="Laurence Webb"]

When I discussed this with JPM I was advised that you can not legally differentiate pay rises between those enrolled in a workplace pension and those without ie. you can't give some people a 3.5% rise in their salary because they opted out of the WPP and others a 1.5% rise because they did not opt out, even though it costs you the same either way.

Individually awarding pay rises would probably get around this.

The other way would be to give everyone a 1.5% rise, but those with a WPP would get another 2% into their pensions.

I assume it works this way so that employees are not encouraged to opt out of the WPP so that they can take home a bigger pay cheque.

[/quote]

Thanks Lawrence, I suspected this might be the case.

RE: Help / Advice with WPP and pay awards

Laurence Webb — Sun, 25 Mar 2018 19:16:12 GMT

Individually awarding pay rises would probably get around this.

The other way would be to give everyone a 1.5% rise, but those with a WPP would get another 2% into their pensions.

I assume it works this way so that employees are not encouraged to opt out of the WPP so that they can take home a bigger pay cheque.

RE: Help / Advice with WPP and pay awards

Peter Faulkner — Sun, 25 Mar 2018 18:05:16 GMT

[quote user="vs0u "]

Speaking from an employee point of view, the employer pension contribution is part of the pension - it's effectively a bribe to get people to stay opted in. It's not a cash benefit that they can spend on whatever they want. If people opt out of the pension they lose the employer contribution as well.

[/quote]

Hi VSOU,

From the businesses point of view it doesn't make any difference whether the money is paid directly to you or into your pension. The money still moves out of the business current account and is then transferred to you as part of your remuneration whether its cash in hand or sitting in that pension account you hope to be able to access one day.

RE: Help / Advice with WPP and pay awards

Peter Faulkner — Sun, 25 Mar 2018 17:55:01 GMT

Hi Michael,

Yes you're right. Everyone was automatically enrolled and as per the rules I wasn't allowed to influence anyone's decision one way or t'other. Some have opted out though. It would have been better if they could have all collectively been in or out, but that would have made things too easy. :)

I've always done my best to be fair to everyone, but I can see this causing problems.

RE: Help / Advice with WPP and pay awards

vs0u — Sun, 25 Mar 2018 16:12:47 GMT

RE: Help / Advice with WPP and pay awards

Michael Woodhouse — Sun, 25 Mar 2018 15:34:40 GMT

The advice I received was that we were to enrol everyone and they had to specifically opt out. I never specifically asked them about joining the scheme, just told them it was happening and from when and that they could opt out. Therefore everyone is a member in the practice.

I'd rather move away from a percentage pay increase for all and would give individuals what I thought they were worth, from nothing to more. In your situation I'd probably say the pay rise was 1.5% plus an increased amount into the pension. Tough luck to those who opted out. We take this into account when doing a pay review.