Personal Pension  

Gov’t tweaks auto-enrolment following consultation

The government has extended the automatic enrolment joining window from one month to six weeks, among other tweaks made following a consultation.

The amount of time companies have to inform employees about their rights under auto-enrolment has been similarly extended to six weeks from one month.

Steve Webb, minister for pensions, said: “Employers and our partners in the pensions and payroll industry have made a major contribution in delivering these landmark reforms since October last year.

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“Now, one year in, we want to build on this success as medium-sized employers prepare to automatically enrol their staff into a workplace pension. These changes are aimed at streamlining the system and making it easier for employers to meet their duties.”

According to the Department of Work and Pensions, respondents to the consultation criticised the previous approach to AE, saying: “The existing approach causes significant difficulties precisely because it does not align with any period used in payroll calculations. This makes automatic enrolment overly complex, creating an additional administrative burden for employers.”

Other tweaks made by the DWP following the responses to its consultation include:

• allowing employers to choose to use alternative definitions of pay reference periods for both assessing jobholder status and determining whether a scheme is a qualifying scheme;

• adjusting the deadlines for registration and postponement notices so it fits with the extended joining window;

• making the extended deadline for passing worker contributions to a pension scheme apply to all new joiners, including contract joiners;

• Tweaks to the opt out notice provisions to make clear that schemes can customise notices; and

• providing greater clarity and consistency concerning the requirements for defined benefit test schemes in relation to the appropriate age, service limits and revaluation that apply in those schemes.