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Government issues employer regulation for pensions auto-enrolment

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The Government has published a package of regulation to help employers prepare for automatic enrolment into workplace pensions.

This package, alongside the revised timetable for automatic enrolment published last week, is designed to make it easier for business to manage their new duties. With these regulations in place, the legislative framework underpinning these reforms is now almost complete.

The DWP is publishing the Government's response to the consultation published last summer on workplace pension reform regulations, and guidance on certifying pension schemes.

Minister for pensions Steve Webb said: "I welcome the positive response to our consultation. These regulations provide key legal requirements and guidance to help employers start enrolling their staff later this year. Automatic enrolment can now begin and start a much-needed seismic shift in pension saving in this country."

The consultation looked at arrangements to put into effect the remaining recommendations of the Making Automatic Enrolment Work Review on optional waiting periods and simplification of the certification process.

It also covered new statutory instruments on special occupations not included previously; seafarers, offshore workers and police not under a contract of employment.

Richard Wilson, NAPF senior policy adviser, said: "We are pleased that the Government has published the final auto-enrolment regulations and the guidance on certification. Combined with the new timetable issued last week, it will help businesses get on and implement these important changes.

 

"Firms now have a clearer sense of what they need to do to prepare for the reforms. This will assist them with business planning, implementing payroll changes, and choosing the type of pensions provision.

"We particularly appreciate that the Government has listened to our requests to extend the deadline for issuing waiting period notices from one week to one month. This will help businesses by reducing some of the administrative burden that important reforms like these create.

 

"Auto-enrolment is a once in a generation opportunity that will help tackle the UK's pensions savings crisis. The injection of clarity provided by the Government is very welcome. Now the Government has to stick with the new plan and do everything possible to help employers and schemes prepare for the launch of auto-enrolment."

 

Lee Hollingworth, Head of defined contribution pensions at consultanct Hymans Robertson, added: "There are some welcome amendments included within the final regulations for auto-enrolment published today. Firstly, the DWP has wisely amended the definition of what is deemed to be 'basic pay' under the certification requirements to specifically exclude items such as commissions and certain allowances. Without this amendment the certification process would have been wholly irrelevant for the vast majority of employers who do not currently deem a car and other allowances as pensionable.

 

"The relaxation of the time allowed to issue the postponement notice to one month is also good news, particularly for employers with a centralised HR function serving multi-locations.

 

"We're now just nine months away from launch day for the biggest companies and the clock is ticking. Preparing for auto-enrolment is a complex, five step process that needs at least 18 months of dedicated time to achieve satisfactorily. Large companies are going to have to invest significant resources into preparing for these changes and therefore should be looking to achieve a good return on their investment by getting this process right for themselves and their employees."

A revised timetable for automatic enrolment was published on 25 January, giving employers clarity and certainty about their starting dates.

This followed the announcement, in November, that small firms would be given more time to prepare for automatic enrolment to help them out in exceptionally tough economic times.