Coronavirus Job Retention Scheme—the pensions implications [Archived]

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

  • Coronavirus Job Retention Scheme—the pensions implications [Archived]
  • What is the CJRS?
  • Pensions coverage of the CJRS until 31 July 2020
  • Ongoing duty to make pension contributions
  • Calculation of pension contributions during flexible furlough (July 2020)
  • Payment of pension contributions from 1 August 2020
  • Impact on salary sacrifice arrangements
  • Interaction with automatic enrolment duties
  • Could pensions contributions be reduced to the legal minimum?
  • What if the employer ended up paying less than the automatic enrolment statutory minimum?
  • More...

Coronavirus Job Retention Scheme—the pensions implications [Archived]

ARCHIVED: This Practice Note has been archived and is not maintained.

What is the CJRS?

At Spring Budget 2020, the government announced several measures to help businesses face the coronavirus pandemic (eg suspending business rates).

One of these measures was the ‘Coronavirus Job Retention Scheme’ (CJRS), which was a temporary scheme generally open to UK employers with a PAYE payroll scheme (subject to certain eligibility requirements). The CJRS came into operation on 1 March 2020 and, after several extensions, continued to operate until 30 September 2021. It was designed to support employers whose operations had been severely affected by coronavirus and which would otherwise have had to make redundancies.

Workers covered by the CJRS were said to be ‘furloughed’.

Under the CJRS, an employer could claim the following in respect of furloughed workers:

  1. until 31 July 2020, 80% of a worker’s wages, up to a monthly cap of £2,500, plus employer National Insurance contributions (NICs) and pension contributions—the value of the pension contributions that could be claimed under the CJRS until 31 July 2020 is discussed in Coronavirus Job Retention Scheme—the pensions implications [Archived] below

  2. in August 2020, just 80% of a worker’s wages, up to a monthly cap of £2,500. Employer NICs and pension contributions were no longer covered by the CJRS from 1 August 2020, so that the employer had

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