Page 30 - London Business Matters May 2020
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 30 Your business   May 2020                    SPONSORED COLUMN Many lessons to be learned from the COVID-19 crisis Pensions and furloughing   Alastair McCapra, CEO CIPR Last year the Chartered Institute of Public Relations (CIPR) went through an extensive process to create a strategy for the next five years; the current crisis hasn’t swept it away and it has proved a steadfast anchor in the most trying of times. There are many lessons to learn from this crisis. For business, one emerging lesson – if it wasn’t already required – is the need for clear, ethical and purposeful communication. Research shows that 65% of the public would trust a professional more if they knew they were a member of a professional body. Our strategy outlines the value we offer to members to be able to confidently deliver for their organisations and the public. Building a resilient community of practice. Helping people network with each other, supporting volunteers, looking after people and helping them navigate a crisis has been more important to our work than ever. CIPR membership means access to a professional community sharing ideas, inspiration, encouragement and expertise and supports members to learn from each other and support each other so that the community is resilient. Advocating Public Relations with Employers, Clients and the Public. There has probably never been a time when this was more important to our future. Employers and clients are the primary beneficiaries of professionalism in public relations. A key driver behind the growth of professionalism in PR is their perception that it contributes value to them both directly and indirectly. Championing Lifelong Learning and the Value of Chartership has always been important to us. Maintaining a competitive advantage in a rapidly changing world requires a commitment to lifelong learning. CIPR membership enables this through the provision of an online platform which enhances access and makes it easy to learn, gather and share resources and record continuing professional development. Many also complete formal qualifications or training. This learning opens up career paths into senior roles both within the public relations sector and beyond. Leading Practice Development. To create a profession that can be sustained in the face of technological, economic, social and political pressure, the CIPR pioneers adaptability and the new ways of creating value. Challenges such as mental health and wellbeing of practitioners, the development of a genuinely diverse profession and the sustaining of ethical competence remain at the core of our work. Consistently high professional standards assure the integrity of members’ work and advice. The coming months are bound to prove testing and the need for strategic and effective communication has never been more important. CIPR members are ready to play their part to support businesses across the capital and the whole country as they prepare to face the challenges of the future.. www.cipr.co.uk by Penny Cogher and Larisa SGordan ince the government pub- lished details about its Coronavirus Job Retention Scheme, there have been many questions asked about what it means for pensions. With the further information provided on pensions and fur- loughing from the Pensions Regu- lator, HMRC and the Treasury, we now have a broad understanding of it. Essentially, an employer’s au- tomatic enrolment duties continue to apply as normal, including re-en- rolment and re-declaration duties, regardless as to whether employees are still working or have been fur- loughed. on three per cent of earnings above the lower qualifying earn- ings threshold (£512 per month up to 5 April and £520 after that). This is the case regardless as to the definition of pensionable earnings used by the employer for auto-enrolment and regard- less of which quality test is used for auto-enrolment. • An employer’s normal payroll processes should be run as usual, with furloughing. So when the employer pays its employees, it should run their pension contri- bution calculation as usual, with national insurance contributions and pension contributions being made from the furloughed em- ployee’s wages and paid as usual. • Some changes are needed if the employer does not use banded qualifying earnings. If so, the employer has to calculate and pay across the pension contribution as normal but the employer also needs to calculate three per cent of the qualifying earnings of the furloughed employees so it can claim for them under the Coro- navirus Job Retention Scheme. An employer’s normal payroll processes should be run as usual, with furloughing. The current scheme rules and contribution requirements contin- ue to apply. The employer must top up any difference in contribution rates if it is furloughing. If the em- ployer is not prepared to do so then this amounts to a listed change as it is a change to its pension contribu- tion structure. The Pensions Regu- lator has confirmed it is possible to reduce employer contributions to a defined contribution (DC) scheme to the statutory minimum but not below it. In normal times, this then re- quires the employer, if it has 50 or more employees, to consult for 60 days before changing its pension contribution structure. This is just a consultation - individual consents are not required. However the Pen- • • • The government will only pay the auto enrolment minimum em- ployer pension contribution i.e. three per cent on the 80 per cent or £2.5k per month if lower of the employee’s regular monthly wage (no commission, fees or bonus). If the employer pays more then the government’s furloughing scheme only covers three per cent, it won’t pay any extra. The government‘s scheme will not cover the employees’ au- to-enrolment pension contribu- tions at all. For members who are part of a pensions salary sacrifice scheme, the 80 per cent pay is based on the employee’s reduced salary and the government’s scheme will only cover three per cent of the salary sacrificed amount. The information that has to be pro- vided to HMRC is all based on what goes through PAYE and so there is no allowance for salary sacrifice. However HMRC has confirmed employees can opt out of a salary sacrifice arrange- ment, if they arrange this with their employer before they are furloughed. The three per cent itself is based    • 


































































































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