On 3 November 2011, the Pensions Bill received royal assent. Among other provisions, the Pensions Act 2011 makes changes to the Pensions Act 2008 and finalises the primary legislation for workplace pension reform. These changes have been anticipated for more than a year after the Government accepted the findings of the Making Automatic Enrolment Work review in October 2010.

The major amendments introduced by the Pensions Act 2011 are:

  • Raising the earnings threshold that workers will need to earn to trigger the employer duty to automatically enrol from £5,035 to £7,475. This amount will be reviewed annually and may be changed by the Secretary of State for work and pensions.
  • Introducing an optional waiting period that allows employers to defer a worker's automatic enrolment date for up to three months (but it is important to note that the worker can opt-in at any time during this deferral period).
  • Permitting a new certification regime that will allow employers to certify that their pension schemes meet or exceed certain criteria. The details of the certification regime are set out in regulations that have not yet been finalised.
  • Providing greater flexibility for employers dealing with automatic re-enrolment by allowing them to pick a date three months either side of their re-enrolment date.

Unfortunately, the Pensions Act 2011 has not completely settled the legislative landscape. Further detail will be provided by amending regulations, final forms of which are expected at the end of 2011 or the beginning of 2012.

Finally, Lord Freud, speaking as part of the DWP's ministerial team, told the House of Lords on 31 October 2011 that "we currently plan to move along the timetable as set out". This echoes comments made by Steve Webb, the pensions minister, to the NAPF Annual Conference. This quashes rumours that the reforms would be delayed, and ensures employers should not delay in drawing up their plans for implementation.

We are preparing a detailed analysis of workplace pension reform that will be issued in three parts over the coming weeks. The first will look at the new employer duties, the second will consider implementing the reforms in existing or new pension schemes and the third will highlight the administration issues arising from the changes.

To find out more about workplace pension reform in the meantime, read our summary of the changes.