From 2012 a new form of compulsory employers’ contributions to pension schemes will start to apply to UK employers.  This will be in addition to the two levels of state compulsory pension. 

Employers must enrol certain “jobholders” into a scheme which meets the quality requirements of the new pension regulations.  “Jobholders” are workers in the UK, aged 16 to 75 whose earnings do not exceed approximately £33.500 a year.  Employees can opt out of the scheme, but will be automatically re-enrolled (with a further right to opt out) approximately every three years. 

The employers’ obligations are being introduced in phases: the first implementation date is 1 October 2012 for employers with a workforce of over 120,000 employees.  The rules will apply to smaller businesses progressively over the following 4 years, although businesses can opt-in early.

The legislation is still in draft, so there remains some uncertainty as to the details of the new regulations.