Employers will have more time to notify staff about auto-enrolment

The Department for Work and Pensions (DWP) has confirmed that employers will have more time to notify their employees about auto-enrolment.

The time period within which employers must notify employees about auto-enrolment into a workplace pension scheme has been extended from one week to one month after the employer’s staging date.

The announcement is part of the government’s response to a consultation on workplace pension reform regulations and guidance on certifying pension schemes, which closed in October 2011.

The consultation looked at arrangements to put into effect the remaining recommendations of the Making automatic enrolment work review on optional waiting periods and simplification of the certification process.

Steve Webb, pensions minister, said: “I welcome the positive response to our consultation. These regulations provide key legal requirements and guidance to help employers start enrolling their staff later this year.

“Automatic enrolment can now begin and start a much-needed seismic shift in pension saving in this country.”

Rudi Smith, senior consultant at Towers Watson, said: “In 2010, the government announced employers that calculate pension contributions as a percentage of basic pay should not have to redesign their schemes, provided that contribution rates were acceptable.

“The problem was that its definition of basic pay was quite different from the one used by a lot of employers. The final version of the defined contribution (DC) certification tests means the government’s proposals better reflect its intentions.”

Richard Wilson, senior policy adviser at the National Association of Pension Funds (NAPF), added: “We are pleased the government has published the final auto-enrolment regulations and the guidance on certification.

“Combined with the new timetable issued last week, it will help employers get on and implement these important changes.

“Firms now have a clearer sense of what they need to do to prepare for the reforms. This will assist them with business planning, implementing payroll changes, and choosing the type of pensions provision.

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“We particularly appreciate that the government has listened to our requests to extend the deadline for issuing waiting period notices from one week to one month. This will help businesses by reducing some of the administrative burden that important reforms like these create.”

Read more articles on the 2012 pension reforms and auto-enrolment