DWP launches consultation on auto-enrolment thresholds

The Department for Work and Pensions (DWP) has launched a consultation on the auto-enrolment thresholds for 2013/2014.

The consultation comes as the UK’s largest employers prepare to auto-enrol their staff into workplace pension schemes.

It sets out the revision factors that the secretary of state may take into account in the annual review of the auto-enrolment earnings trigger and the qualifying earnings band, the government’s approach, the evidence base and the proposed rates for 2013/2014.

The consultation questions include:

  • Are there any other factors that should be taken into account for the revision of the auto-enrolment trigger for 2013/2014?
  • Is it your experience so far that alignment with existing payroll threshold reduces complexity?
  • What pensions tax relief arrangement do you (or your clients) use and why?

The government consulted on the auto-enrolment thresholds for the first year of the legislation to test the approach of an annual review, the relevant revision factors for each threshold, and the balance between targeting, administrative simplicity and employer costs.

The first consultation demonstrated where respondents felt the balance lay and the issues for employers, individuals and the pensions industry. The result was the Automatic enrolment (earnings trigger and qualifying earnings band) order 2012, which prescribes the rates for 2012/2013.

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The new consultation is aimed at employers, employee representatives and pension industry professionals, including scheme administrators, payroll administrators, independent financial advisors and employee benefit consultants.

The consultation period began on 6 September and runs until 17 October 2012. The government is aiming to respond to the consultation in November, around the time of the Autumn Statement.