From 1 October 2012, new provisions will begin coming into effect requiring employers to automatically enrol eligible jobholders into pension schemes, as well as requiring employers to make certain minimum level of contributions. Although it is still almost a year until these provisions come into force, the reforms have wide-reaching implications and it is important that employers familiarise themselves with the new regime and start preparing.
The requirement to auto-enrol is being introduced on a rolling basis between 2012 to 2016 depending on the size of the employer, with large employers first followed by medium sized and then small employers. The contribution levels will also be phased in.
From 1 October 2012, employers who employ more than 120,000 employees will have to enrol all jobholders who meet the age and earnings criteria into an ‘automatic enrolment scheme’. This can be the central scheme set up by the Government (the ‘National Employment Savings Trust’ or ‘NEST’) or an alternative occupational or personal pension scheme established by the employer that counts as a ‘qualifying scheme.’
A good summary of the position can be found at the following link.
There were rumours recently that the Government was considering postponing this initiative so it is still possible that the position will change over the coming months.