With effect from 2012, the Pensions Act 2008 will require employers to automatically enrol eligible jobholders into "qualifying workplace pension saving", with a minimum employer contribution. Employers will be able to choose which qualifying pension saving vehicle they adopt in order to discharge this duty; the new personal accounts scheme, occupational schemes and stakeholder schemes will all be capable of being used. Workers will have the right to opt out.

The DWP has published the first of three consultation papers on the new auto-enrolment/personal accounts regime. The paper attaches draft regulations and sets out the practical arrangements by which employers will be required to:

  • Enrol workers into a workplace pension scheme.
  • Provide information to workers and schemes.
  • The arrangements by which workers can opt-out of automatic enrolment.  

Broadly, the auto-enrolment timetable will operate as follows:

  • Day 1: automatic enrolment date. This is either the effective date of the legislation or the date the individual starts work and meets the criteria (by reaching age 22 (and being in receipt of qualifying earnings) or at any time the individual becomes in receipt of qualifying earnings between the age of 22 and pensionable age).
  • Day 14: the member must be enrolled (with contributions backdated to Day 1).
  • Between day 14 and day 44, the member may opt out. If he does so, then the employer must refund his contributions.  

The consultation document can be found here. The consultation period closes on 3 June 2009.