Pensions  

DWP announces greater auto-enrolment flexibility

Pensions minister Steve Webb has announced a series of procedural changes to the auto-enrolment programme aimed at increasing flexibility for smaller companies.

Following a consultation launched in September 2012 that attracted 112 responses, the government has decided to amend its original regulations.

Industry experts, however, have warned not to let this message be interpreted incorrectly, saying both companies and intermediaries must stay on top of staging.

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The main technical change extends the window for joining auto-enrolment from one month to six weeks. In addition, employers will have longer to provide information to employees on joining and opt-in rights, with the time period also extended to six weeks. Consequently, the deadlines for registration and postponement will also be extended.

David White, managing director of Creative Auto-enrolment, said it was important to understand this does not affect staging dates. “38,000 companies have to comply with legislation next year, and 36,000 of those have staging dates in the first six months,” he said.

“The demand will be unprecedented. Extending the joining window helps, but it helps with the back end of the process. It doesn’t change the time between now and your staging date to get things done. My biggest concern is that people will think ‘we can take our foot off the gas’. That would be fatal. Intermediaries need to take control, or lose control.”

Most of the changes will be introduced from 1 November, but those that relate to the joining window and registration deadlines will come in from 1 April 2014.

Mr Webb said he wanted to build on the success so far of auto-enrolment, with the changes aimed at streamlining the system and making it easier for employers to meet their duties.

Research from the Department for Work and Pensions in September found that less than 10 per cent of employees were opting out of auto-enrolment, considerably better than initial forecasts of up to 30 per cent. These figures only reflect the status of large employers, however, and higher opt-out rates were anticipated in small and medium businesses so the decision to increase flexibility is expected to help reduce this.