Pensions Regulator issues further guidance on auto-enrolment

In previous editions of the Pensions E-Bulletin we have looked at various issues around the introduction of a requirement for employers to auto-enrol "workers" into a pension scheme. In May and June this year, the Pensions Regulator issued new guidance to employers and trustees (and their advisers) reminding them of their duties and outlining the steps they should take in implementing auto-enrolment.

Adviser and employer guidance

Nine separate detailed guidance notes have been issued which are aimed at employers with in-house pension teams (and their advisers) including such topics as who will count as a "worker" for the purpose of the new duties, how to process 'opt-outs' from workers who want to leave the scheme and the rules on employers using their existing schemes to meet the new duties.

The Regulator has also started writing letters to the UK's largest companies warning them to start making preparations for their staging dates (which, for the largest employers, begin in 2012). Smaller companies will be contacted as their staging dates approach.

Trustee guidance

The Regulator has issued a checklist which provides existing occupational scheme trustees with an overview of what they might need to do to ensure that their scheme is ready if it is to be used by the employer for automatic enrolment. The five steps for trustees are:

  • know when you need to act;
  • start planning the process;
  • consider the impact on your existing scheme;
  • mobilise an implementation team; and
  • communicate the changes to all members.

Although it is anticipated that most schemes will be capable of being adapted without substantial alteration, consideration will have to be given, in particular, to rules on joining the scheme, and their inter-relationship with auto-enrolment opt in and opt out rules.

Employers should be starting to prepare now for the changes they will need to make to existing schemes if they are to be used as the pensions vehicle and also to payroll administration.