Employers have until November 5 to have their say on some of the key elements of the Government’s auto-enrolment pension reforms.
The introduction of auto-enrolment into pension schemes is one of the government’s major initiatives in helping people save for retirement. It will affect over 7m people, many of whom will be employed in small businesses. The reforms place a duty on employers to enrol all eligible employees into a workplace pension arrangement and to contribute at least 3 per cent of employees’ qualifying earnings.
The consultation on the second batch of regulations has now commenced and is an opportunitiy for employers to have their say about the reforms and how auto-enrolment is carried out.
Reseach from the Department of Work and Pensions (DWP) shows that only 16% of organisations in the manufacturing industry currently contribute to a pension scheme.
Angela Eagle, Minister for Pensions and the Ageing Society, says that the landmark reforms will “ensure millions of workers on low and moderate incomes will be able to save for retirement in a workplace pension for the first time. Our reforms mean people will receive a mandatory employer contribution and tax relief from the State. We encourage all stakeholders to continue to play their part in this important consultation as we deliver this ambitious programme.”
This consultation will run until 5 November 2009 and is available at www.dwp.gov.uk/consultations.
In addition the Government is also publishing a second consultation, on draft guidance on the use of Group Self Invested Personal Pensions (SIPPs) for auto-enrolment and the use of default options in workplace personal pensions (WPPs) used for auto-enrolment. This consultation will run until 17 December 2009 and is also available at www.dwp.gov.uk/consultations.