The DWP has issued a consultation (which closed on 16 February) on changes to auto-enrolment with the aim of further simplifying the process and reducing compliance burdens on employers. It covers:

Possible exceptions

  • introducing further exceptions to the employer auto-enrolment duties so that employers have a discretion as to whether or not to comply with auto-enrolment (as opposed to being obliged to comply) in relation to the following:
    • jobholders who are directors of the company by which they are employed;
    • ‘genuine’ partners in limited liability partnerships; this follows the Supreme Court decision in Clyde & Co LLP v Bates van Winkelhof  (See our e-alert on the subject) which found that LLP partners could be ‘workers’ for the purposes of certain employment legislation which in turn could mean that they are workers for the purposes of auto-enrolment as well. The Government thinks there is a strong case for there to be an option to exclude ‘genuine’1LLP partners despite this case;
    • those individuals who are claiming tax-protected status as a result of the reduction of the lifetime allowance from 6 April 2016 (see above). It appears that this will apply where the employer has reasonable grounds to believe that the worker has transitional protection in relation to their pension savings which would be consistent with the previous approach to this sort of exemption but the DWP has yet to confirm the wording to be used; and
    • individuals who have been paid a winding up lump sum, cease to be employed and are then re-employed by the same employer and become eligible for auto-enrolment or re-enrolment all within the same 12 month period.

Declarations of compliance

Employers are required by law to make auto-enrolment compliance declarations at various stages of the auto-enrolment cycle – e.g. in relation to the initial requirement to auto-enrol and then in relation to re-enrolment (see our article on the latter in the December 2015 issue of Pensions Pieces). The DWP is proposing to streamline the timeframes in which the employers are required to complete the further declarations of compliance (because of the current difficulties that exist with having two deadlines depending on whether or not employers have workers who need to be re-enrolled).

Bringing forward staging dates

The DWP is proposing to introduce various easements for employers wishing to bring forward their staging dates – e.g. for those employers who have no one to auto-enrol at their staging dates, they will not need to obtain the agreement of a pension scheme to bring forward their staging date.

Defined benefit pension schemes

Employers using defined benefit pension schemes were able to evidence satisfaction of the scheme quality requirements by the existence of a valid contracting-out certificate, but this will no longer be possible with the end of contracting-out from 6 April 2016. Therefore, amendments are proposed to allow, for a transitional period only, employers whose schemes satisfy the contracting-out conditions as at 5 April 2016 and have not changed the benefits in their schemes to apply the cost of accruals test at scheme level (i.e. a slightly modified version of one of the other alternative scheme quality requirements). Without that easement, the test would need to be applied at benefit scale level in a scheme with more than one benefit scale and where there is a material difference in the cost of the benefits accruing to the relevant members in each benefit scale. The easement will apply until the earlier of the effective date of the first actuarial report on or after 6 April 2016 or 5 April 2019.


The DWP is proposing to make regulations on the above, following its consultation response, in March, with a view to implementing them in April 2016. It is helpful that the Government is continuing to attempt to make compliance with auto-enrolment more straightforward for employers and to iron out areas where the legislation clearly appears to have unintended consequences. Employers should monitor these proposed amendments as part of their overall auto-enrolment compliance strategy and take legal advice where necessary to check how they might apply to them if and when the legislation in this regard is finalised.