From 1 October 2012, new laws come into force, requiring all employers in Great Britain to automatically enrol eligible “jobholders” into a pension scheme.
Automatic enrolment was introduced for all employees who meet certain qualifying criteria, in an attempt by the Government to encourage more people to save for their retirement. The scheme was due to be phased in for all employers over a four-year period, with the implementation dates dependent on the number of employees that an employer has.
However, the Government has recently announced that small businesses – defined as those employers who have fewer than 50 employees - will be given additional time to prepare for the implementation of auto-enrolment.
Under the revised timetable, small businesses will have to automatically enrol their staff into a pension scheme in May 2015, instead of the April 2014.
Pensions minister Steve Webb announced in Parliament that all jobholders previously “due to be enrolled this side of July 2013 will see no change in their dates.” Based on the Government’s existing implementation timetable, these comments would suggest that auto-enrolment dates for employers with fewer than 3,000 “jobholders” may also be delayed, although no revised date has been announced yet.
The announcement is good news for smaller employers, although larger employers must still comply with the requirements as originally set out in the timetable.
The required employer contribution rate will remain unchanged until all businesses have started auto-enrolment; however, the Department for Work and Pensions has indicated that the increase in the minimum employer contribution rate from 1 per cent to 2 per cent will be delayed beyond its original date of 1 October 2016. We will have to wait and see whether the Government also delays the date on which the minimum employer contribution rate rises to 3 per cent (which is currently 1 October 2017.)
If you have any concerns about how auto-enrolment will affect your business, please contact me at email@example.com.