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Basic pay as pensionable pay - contribution query

  • Member PM.Dip
  • Practice Licence
  • 17 posts
  • # 112423

My employer is using Peoples pension and using statutory 1% employer 1% employee contribution rates using total basic pay as pensionable. I came across some information from the pensions regulator that potentially looks like we need to either change to total pay or he needs to be contributing an extra 1% as the employer. 

The software did not issue any warnings when the parameters were set up and People's Pension have not queried it either. 

I have looked at the Pensions Regulator site and all I can find which relates to this is if you are using an existing pension scheme and declaring it to be compliant.  Is this understanding correct and that as we are using a compliant scheme the basic pay as pensionableis OK and the 2% total contributions is fine too?



  • 20 posts
  • # 114834


It sounds like you have setup using either tier 2 or tier 3 certification which requires a 2% minimum contribution with at leaset 1% from the employer. 

Does it include anything other than basic salary such as bonus, overtime, commission etc? If it doesn't then you probably should be using tier 1 which does require a 2% minimum from the employer. 

I would check the scheme rules to make sure your payroll software is setup correctly.  The People's Pension should also be able to help you with checking how your scheme is setup. 


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