Steve Webb, the Minister of State for the Department of Work and Pensions (DWP), confirmed the timetable for automatic enrolment in a recent Government announcement.
He re-affirmed the Government's commitment that automatic enrolment will start on time, from October 2012, and apply to all employers. He also confirmed the adjustment of the timetable so that small businesses are not affected by the reforms during this Parliament, thus providing them with some additional breathing space to prepare for the reforms whilst operating in tough economic times.
Within the revised Automatic Enrolment timetable:
- All employers with an existing staging date of on or before 1st February 2014 are unaffected. This means that no large employer will have to make any changes to their plans, which in many cases, are already advanced.
- Medium-sized employers will be re-allocated automatic enrolment dates between 1st April 2014 and 1st April 2015. This means that the implementation dates of some of these employers will be up to nine months later. However, around 70% of eligible workers will still be automatically enrolled before the end of this Parliament compared with around 75% under previous arrangements.
- Small employers will be allocated automatic enrolment dates between 1st June 2015 and 1st April 2017.
- New employers setting up business between 1st April 2012 and 30th September 2017 will have automatic enrolment dates between 1st May 2017 and 1st February 2018 inclusive. Any new employer setting up from 1st October 2017 onwards will be required to comply immediately if paying earnings which attract PAYE deductions in respect of any worker.
- In addition, a proposal that the increase in the minimum rate of employer pension contributions, from 1% to 2% of banded earnings, be delayed by one year; from 1st October 2016 to 1st October 2017. Contributions will increase to 3% from 1st October 2018.
The DWP plan to publish a consultation document on the detail of these changes following this announcement and draft regulations and an impact assessment will be published alongside this consultation document.
If you want to find out more or need advice about the implications of the pension scheme automatic enrolment, for your business, contact one of the team who will be happy to help.