Employers groups and unions have broadly welcomed the government's pensions White Paper outlining the workings of 'personal pension accounts'.
The government today revealed the latest part of its shake-up to protect the retirement incomes of future workers.
Work and pensions secretary John Hutton told parliament that personal accounts would be set up for low-paid workers without access to a company scheme.
Employee contributions of a minimum 4% of salary would be added to contributions of 1% in tax relief and 3% from employers.
Martin Temple, director-general of manufacturers' body the EEF, said: "This White Paper ticks most of the boxes are far as manufacturers are concerned.
"In particular, the government has responded positively to our concerns about the need for simplicity."
Meanwhile, Brendan Barber, general secretary of the TUC, said: "Today's proposals are to be warmly welcomed. They are another important building block in a new pensions settlement.
"In particular, we welcome the government's rejection of employer lobbying for a waiting period before employees can join or rejoin the scheme in each new job."
The EEF welcomed the following measures in the White Paper:
- The decision to base the model for delivering personal accounts on the Pensions Commission's National Pension Savings Scheme.
- Auto-enrolment of employees into personal accounts when they start employment.
- Simple and transparent criteria for determining how employers with an occupational pension scheme can be exempt from having to automatically enrol their employees into personal accounts.
However, Barber said there were still many important details yet to be addressed.
"Our one disappointment is that the administration of the new scheme will take place in the private sector, even though the public sector already has experts collecting contributions from employees and employers in the shape