The final rules governing auto-enrolment into workplace pension schemes from 2012 have been announced.
From October, 2012 the country’s largest businesses (those with more than 120,000 employees) will join the auto-enrolment regime. Employer will then be staged by size from largest to smallest through to 2016, with start up small businesses given additional time to prepare to comply.
Work and pensions secretary Yvette Cooper said the reforms were the most radical change to workplace entitlements since the introduction of the national minimum wage.
Cooper said: “Even during these difficult economic times, employers, industry and unions agreed with us that these reforms were vital in giving millions of people the chance to save in a pension for the first time.
“All employers will be required to pay into a pension for their workers for the first time. We have responded to the concerns of business to make the introduction of these reforms as straightforward as possible. Start-up businesses will be given valuable extra time to prepare for these changes as we come out of recession.
“The cost to all of us of doing nothing in the face of an ageing society is too great to ignore. Currently 14 million people get no contribution from their employer towards a pension and around 7 million people are not saving enough for their retirement.”
TUC general secretary Brendan Barber, said: “This is a major step forward in building a new and progressive pensions system based on the auto-enrolment of workers into pensions and compulsory employer contributions.”
Nick Palin, director of HR at the Forum of Private Business, said: “We were listened to and our initial fears that these compulsory pensions contributions would hit small businesses too quickly for them to adjust have to some degree been addressed. However, there remain serious concerns that small firms, which comprise more than 99% of all businesses in the UK and account for 59% of the private sector working population, will ultimately bear the brunt of the pensions crisis and that job creation will suffer as a result.”
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