The Pensions Bill currently going through Parliament will require employers to auto-enrol employees into a pension scheme. This requirement will be introduced in October 2012 for the largest firms, and then gradually rolled out to smaller employers until 2017 when every workplace will be covered. Employers who do not have their own pension scheme must use NEST, the Government established financial product. Contributions from employers will be a minimum of 3% of earnings for each employee. This too will be phased in.
The Department for Work and Pensions has just issued a short overview of the new employer pension duties. Detailed guidance about preparing for the changes has been published by the Pensions Regulator, which will be responsible for compliance and enforcement once the new regime is up and running. The guidance notes, aimed at large employers who will be first to comply, cover questions such as:
- Who will count as "workers" for the purpose of the new duties?
- Can employers bring forward their staging dates voluntarily?
- When can employers use their own existing schemes to meet the new duties?
The Regulator has started writing to the UK's largest companies warning them to make preparations for their staging dates.