Government consults on simplifying auto-enrolment process

Pension plan pot-2015

The government has launched a consultation to gain views on its proposals to simplify the administration process of auto-enrolment.

The draft regulations aim to reduce the burden on employers and ensure that those who benefit most from saving into a pension will continue to be auto-enrolled without unintended consequences for individual savers.

The proposed measures aim to set out a simpler process for employers to bring their staging date forward, a simpler process for re-declaration of compliance, and further exceptions to employers’ duties in certain circumstances.

The consultation, which will run until 16 February 2016, seeks the views of employee benefits consultants, employers, pension industry professionals, pension scheme administrators and payroll administrators.

The government will publish the results of the consultation and any changes to regulations in March 2016. The changes would come into effect in April 2016.

Tom Barton, pensions partner at Pinsent Masons, said: “Auto-enrolment is all about making sure (generally) lower earners save for retirement, look after their needs and thus relieve the future strain on the public purse. The principle is simple; the practice is not.

“The general thrust of the proposed new technical changes is to take some of the pain away of compliance, for employers generally and micro employers in particular.

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“Ideally a simpler regime would be even simpler than that set out in the draft regulations. For example, it is proposed that directors and LLP partners can be excluded from auto-enrolment but retain a right to opt-in. Why? These sorts of individuals are generally in a position to have a sensible conversation about pensions, or make their own provision privately.

“It also doesn’t address the big problem for employers, [which is] trying to align payroll reality to legislative requirements. Compliance is not easy. It should be easier to live with embedded process and procedure that poses no threat at all to policy objectives.”