New laws have come into force today, 1 October 2012, that require UK employers to automatically enrol eligible workers into a pension scheme and make mandatory minimum contributions on their behalf. The reforms are being implemented gradually, with only large employers that employ 120,000 or more staff having to comply from today, and those employing 50,000-119,999 staff having to comply by 1 November 2012. By October 2013, employers employing more than 800 employees will be subject to auto-enrolment. Smaller employers will have later staging dates depending on employee numbers. Full details of the staging date timeline can be accessed here.

In summary, from the date the duties apply, employers must arrange for all eligible “jobholders” that include permanent and temporary employees and agency workers, to be automatically enrolled into a qualifying pension scheme, which can be an existing occupational or personal pension scheme provided it meets certain requirements. Alternatively, employers can enrol jobholders into the National Employment Savings Trust (NEST), a government-established scheme. Employers will also be obliged to pay mandatory minimum contributions into the pension scheme or, when dealing with a final salary scheme, offer a minimum level of benefits.

For more information on the scope of the duties for employers and which staff will be eligible, please see the Auto-Enrolment Factsheet. For the issues employers need to consider in the lead up to the new pensions regime see our checklist.