The Department for Work and Pensions ('DWP') has consulted on a range of proposed exemptions from an employer’s obligation to auto enrol certain employees. These exemptions largely address scenarios where auto enrolment can cause practical difficulties and/or make little sense to apply given the circumstances. The DWP has now issued its response to its consultation on these scenarios and has concluded that there is a case for introducing exemptions in relation to a worker:
- who has protected his pension savings from certain adverse tax consequences (for instance by fixed or enhanced protection) and where one of the conditions of that protection is that there is no further benefit accrual;
- whose employment with his employer is about to end;
- who has given notice of his imminent retirement; or
- who has recently already opted out, having been automatically enrolled into his employer’s pension scheme under his contract of employment.
The DWP is to consult on final proposals and draft regulations to cover the exemptions, but this is a helpful indicator of what we might expect when they are issued. If carried forward, they will provide welcome relief in circumstances where it makes little practical sense to apply the auto enrolment requirements and/or where scenarios cause unnecessary administrative inconvenience and tax risk for employers and workers.