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Firms' 90 day allowance to auto-enrol staff in pensions schemes comes with conditions

The Government has announced employers will be allowed 90 days before they auto-enrol staff into private pension schemes after 2012.

But in order take advantage of the rule, the employer must provide a defined-contribution scheme into which they contribute at least 6% of employees' earnings and the total contributions must total 11% of earnings. This means auto-enrolment cannot be postponed for personal accounts - into which employers will contribute 3% and employees contribute 4%.

John Jory, deputy chief executive of B&CE Benefit Schemes, said: "We are pleased the Government is allowing some flexibility to assist employers with auto enrolment into a private pension scheme after 2012. But why wait until then for the introduction of auto-enrolment in the first place?

"We believe the Government still needs to tackle the major issue of auto-enrolment and means-tested benefits in retirement. This needs to be resolved as, at the moment, there is no guarantee all those who save into a pension will be better off than those who do not."