The government has extended the timeframe employers will have to automatically enrol employees into a qualifying pension scheme and pushed back the date by which organisations must contribute the full 3% on banded earnings under pensions legislation due to come into effect in 2012.
A consultation paper published by the Department for Work and Pensions (DWP) has proposed that the requirement for employers to auto-enrol staff into either a qualifying workplace pension scheme or the new system of personal accounts will be gradually rolled out over a three-year period from October 2012.
This means it will be October 2015 before this is applied across the board. It had previously been suggested this process would take no more than 18 months.
The DWP has also proposed pushing back the deadline for employers to reach the full 3% contributions on banded earnings by a year from October 2015 to October 2016.
The consultation stated: "We believe it is necessary to stage the reforms, including the employer duties, over a three-year period. This strikes the right balance between getting people into savings as quickly as possible and minimising the operational risk associated with the reforms.
"The three-year period would include a number of one-month breaks in which no employers are staged in, to allow any backlogs or unplanned events to be addressed."
The consultation will be open until 5 November 2009. It is the final consultation on the regulations that will be needed to deliver automatic enrolment.
The government has also published a second consultation on the use of group self-invested personal pensions for auto-enrolment and the use of default options in workplace pensions used for auto-enrolment. This will run until 17 December 2009.
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