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Pensions Act 2011

Section 8: Review of earnings trigger and qualifying earnings bandSection 9: Rounded figures for earnings trigger and qualifying earnings band

82.Section 8 substitutes a new section 14 and section 9 inserts a new section 15A in the PA 2008. These sections introduce a new mechanism to review and revise the new automatic enrolment earnings trigger and introduce a new mechanism to review and revise the qualifying earnings band in section 13 of the PA 2008.

83.The new section 14 provides that the Secretary of State must consider in each year whether the amounts for the automatic enrolment earnings trigger, or the upper or lower limits of the qualifying earnings band, should be increased or decreased. The section provides that the Secretary of State may take into account national insurance earnings limits and thresholds, the income tax personal allowances, the level of basic state pension for single adults, or the general level of prices and earnings. The Secretary of State may also consider any other factors that are considered relevant. Any changes will be made by order.

84.The amounts for the automatic enrolment earnings trigger, and the upper and lower limits of the qualifying earnings band, relate to a jobholder’s gross earnings in a nominal pay reference period of 12 months. Sections 3, 5 and 13 provide that, where an employer’s pay reference period is less or more than 12 months, then those amounts will be proportionately less or more. The new section 15A provides a power for the Secretary of State to specify rounded figures for any specified pay reference period in place of the exact proportionate amount that would otherwise apply. This allows the Secretary of State, for example, to specify rounded monthly or weekly figures. The Secretary of State may choose to round up or down.

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