DWP confirms revised Auto-Enrolment details for small employers

Bevan & Buckland AccountantsIn November 2011, the Government has announced that it would defer the introduction of pension auto-enrolment for employers with less than 50 eligible employees.  The aim was to give smaller employers more time to adjust to the changes, in particular due to the continuing tough economic conditions.

The revised timetable was announced to Parliament in a written Ministerial Statement today by Department For Work & Pensions Minister, Steve Webb.  We have updated our employer helpsheet on auto-enrolment and NEST, which can be accessed here.

Also announced was a delay to the date when compulsory employer contributions would have risen from 1% of earning to 2%.  This will come into force a year later on 1st October 2017 for all employers.

At the Parliamentary Committee meeting today, Steve Webb also announced that he didn’t see a need for small firms to take (or pay for) advice on auto-enrolment.  In our view this is very misguided, as if they follow this view and simply enrol all employees in the NEST scheme most smaller employers will have to carry the full burden of administration and advice themselves.  We are already aware of at least one alternative scheme to NEST, from Dutch provider NOW:Pensions, with the real possibility of further schemes from leading UK insurance companies as well.  If an employer simply selects NEST over the alternatives are they then deemed to have given regulated pensions advice to their workforce?  When employees ask for details of the funds into which their money will be invested, will the employer be able (or indeed want to) help them decide which to choose?

Gareth Tregidon

Gareth Tregidon

There is no doubt that many smaller employers will have no trouble dealing with the

multitude of issues that auto-enrolment will bring.  For everyone else, please ask us and we’ll do what we can to help.

Gareth Tregidon

Manager, Financial Planning

 25th January 2012

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