Auto-enrolment—hybrid schemes and the quality requirements

The following Pensions practice note provides comprehensive and up to date legal information covering:

  • Auto-enrolment—hybrid schemes and the quality requirements
  • The quality requirements for hybrid schemes
  • Types of hybrid scheme
  • Ancillary benefits
  • Hybrid schemes to which the general rule applies (rule 3)
  • Sequential hybrid schemes (rule 4)
  • Self-annuitising hybrid schemes (rule 5)
  • Combination hybrid schemes (rule 6)
  • Hybrid schemes to which more than one rule applies (rule 7)
  • Hybrid schemes and certification
  • More...

Auto-enrolment—hybrid schemes and the quality requirements

CORONAVIRUS (COVID-19) UPDATE: On 9 April 2020 the Pensions Regulator (TPR) published ‘Automatic enrolment and pension contributions: COVID-19 guidance for employers’ which sets out how employers can meet their automatic enrolment duties as they navigate the effects of the coronavirus pandemic. The guidance states that automatic enrolment duties continue to apply as normal, including re-enrolment and re-declaration duties. For more information, see Practice Note: Coronavirus (COVID-19)—the pensions implications for employers — Automatic enrolment duties.

TPR recognises that some employers may want to decrease employer contributions to the automatic enrolment statutory minimum (3% of qualifying earnings). TPR has issued some guidance setting out relevant considerations in relation to this. Moreover, employers who are currently certifying their DC scheme on an alternative quality requirement may be able to change their scheme rules to match the 3% of qualifying earnings. To achieve this, they can end the current certification period early under the certification rules, according to TPR.

For further information, see Practice Note: The Coronavirus Job Retention Scheme—the pensions implications — Can pensions contributions payable be reduced to the legal minimum?.

The quality requirements for hybrid schemes

Hybrid schemes are schemes which provide both defined benefits and money purchase benefits. Special rules apply to hybrid schemes in relation to meeting the requirements for a qualifying scheme under the auto-enrolment legislation

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