Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+

Personnel Today

Register
Log in
Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+

Auto-enrolmentPay & benefitsPensions

Pensions: Countdown to 2012 – are you prepared?

by Personnel Today 13 Nov 2009
by Personnel Today 13 Nov 2009

Consultation recently closed on the latest in a series of papers dealing with the personal accounts and automatic enrolment reforms – ‘Workplace Pension Reform – Completing the Picture’. The document gives a fairly detailed picture of how the reforms are designed to work and how to start preparing for 2012. But what are the headline issues for employers? Pensions and legal expert Alison Cribbs runs through them.



Staging


Although the new obligations will be launched in October 2012 as previously announced, the intention is now to ‘stage’ implementation over a three-year period. The plan is to introduce the requirements for large and medium-sized employers over the first year, with small and micro-employers being brought in over the following two years. Given that larger employers are most likely to be geared up for the reforms, this seems a sensible way to deal with the practical aspects of bringing large numbers of employers within the regime.


Contributions


In recognition of the costs of the new requirements, the principle of staging has been extended to the payment of contributions. The proposal is to phase in minimum contribution requirements over time to help employers and individuals adjust to the additional costs gradually. The minimum contribution for a qualifying defined contribution arrangement will not reach the long-term level of 8% (of which at least 3% must relate to employer contributions) until October 2016, with 2% being required from October 2012 and 5% from October 2015. On the basis that it is not possible to phase in contributions for defined benefit schemes, the proposal is to allow employers using defined benefit schemes to delay automatic enrolment until the staging period has ended. These allowances are likely to be welcomed by employers to allow them time to adjust to the new requirements.


Scheme closures


A further protective mechanism is proposed in relation to scheme closures, so that employers that close their scheme before the end of the transitional period must automatically enrol workers into an alternative scheme and back-pay missed employer contributions. Employers will need to factor this in to any changes to their pension arrangements.


Temporary workers


Although the Act allows employers to postpone automatic enrolment for a period of time where they offer high-quality schemes, the consultation envisages changes to prevent employers from using postponement for jobholders on short-term contracts of three months or less.


Managing opt-outs


The consultation includes a proposal to relax the normal 19-day rule for the payment of contributions deducted from a worker’s earnings to the trustees or managers of the scheme to the 19th day of the second month following the month of the jobholder’s automatic enrolment date. This means that contributions will not have to be passed over until after the opt-out period has ended, and responds to criticism raised during earlier consultation that having to pay over contributions and then subsequently refund them where a jobholder opts out creates significant burden and cost.



Penalties for non-compliance


Finally, employers should be aware that the reforms are backed up by a non-compliance regime and, in addition to issuing compliance notices and unpaid contribution notices, the Regulator can issue penalty notices of up to £10,000 per day under the proposals.


Sign up to our weekly round-up of HR news and guidance

Receive the Personnel Today Direct e-newsletter every Wednesday

OptOut
This field is for validation purposes and should be left unchanged.

by Alison Cribbs, Sacker & Partners LLP


Personnel Today

Personnel Today articles are written by an expert team of award-winning journalists who have been covering HR and L&D for many years. Some of our content is attributed to "Personnel Today" for a number of reasons, including: when numerous authors are associated with writing or editing a piece; or when the author is unknown (particularly for older articles).

previous post
Veolia to create rehab centre for injured staff
next post
CBI warns of pay restraint and ‘anaemic growth’ in 2010

You may also like

Public sector workers gain pay rises of up...

22 May 2025

Next to improve wage-setting transparency after shareholder pressure

16 May 2025

TPT to launch multi-employer CDC pension scheme

12 May 2025

Ofgem workers ballot for strike action

2 May 2025

Millions at risk of retiring under-pensioned

30 Apr 2025

What will reward look like in 2035?

28 Apr 2025

NI increase has not caused ‘knee-jerk reaction’ in...

23 Apr 2025

Post-pandemic starters seek more pay for on-site working

10 Apr 2025

Maisie Adam to host Employee Benefits Awards 2025

3 Apr 2025

Two-thirds of healthcare workers threaten to quit without...

31 Mar 2025

  • 2025 Employee Communications Report PROMOTED | HR and leadership...Read more
  • The Majority of Employees Have Their Eyes on Their Next Move PROMOTED | A staggering 65%...Read more
  • Prioritising performance management: Strategies for success (webinar) WEBINAR | In today’s fast-paced...Read more
  • Self-Leadership: The Key to Successful Organisations PROMOTED | Eletive is helping businesses...Read more
  • Retaining Female Talent: Four Ways to Reduce Workplace Drop Out PROMOTED | International Women’s Day...Read more

Personnel Today Jobs
 

Search Jobs

PERSONNEL TODAY

About us
Contact us
Browse all HR topics
Email newsletters
Content feeds
Cookies policy
Privacy policy
Terms and conditions

JOBS

Personnel Today Jobs
Post a job
Why advertise with us?

EVENTS & PRODUCTS

The Personnel Today Awards
The RAD Awards
Employee Benefits
Forum for Expatriate Management
OHW+
Whatmedia

ADVERTISING & PR

Advertising opportunities
Features list 2025

  • Facebook
  • Twitter
  • Instagram
  • Linkedin


© 2011 - 2025 DVV Media International Ltd

Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+