Yesterday the DWP published the outcome of last autumn's consultation on auto-enrolment, "Workplace Pension Reform: Completing the Picture". The 76-page official Government response, while shorter than the condoc itself (which ran to 218 pages), accepts that the original proposals were too prescriptive, and complicated. Certification and postponement were the two most controversial areas. Regulations on the latter have been revised, while the certification regs have been withdrawn for the time being.

Respondents felt that the Impact Assessment significantly underestimated the costs to employers of administering the new process and that furthermore the administrative costs did not take account of the individual processes required to comply. Comparison of Table 4.6 on page 161 of the revised Impact Assessment with Table 1.4 (p.14 of the Sept 09 draft IA) indicates the Government has dramatically increased its estimates for the administrative burden on employers in Year 1:

• from £5 per employee to £20 in large companies (250+ employees);
• from £15 to £30 in medium firms (50 - 249 staff);
• from £25 to £50 in small firms (5 - 49 staff); and
• in micro-firms with fewer than 5 employees, from £70 to £130 per employee.

The key regulations were also published yesterday*. Under s.143 PA 2008, each House of Parliament has to approve the draft Occupational and Personal Pension Schemes (Automatic Enrolment) Regulations 2010, which set out the practical arrangements underpinning the automatic enrolment objectives of the Act.

The regulations outline the process and time limits for employers to achieve active membership for jobholders and the information flows required between employers, pension schemes and jobholders. The regulations also set out arrangements for employers who already operate a higher quality scheme to postpone automatic enrolment for 3 months if they wish to. The regulations outline the arrangements and time limits by which the employer has to re-enrol eligible jobholders who have opted out or left pension saving.

The regulations set out the process and arrangements where a jobholder chooses to opt out of pension saving, including the rules for refunding contributions. They also outline the arrangements by which jobholder and workers who are not eligible for automatic enrolment can voluntarily opt in to pension saving.

The regulations set out additional scheme quality requirements for:

• defined benefit pension schemes (schemes where the benefits provided at retirement are based on the member's service and earnings);
• hybrid schemes (intermediate schemes between those which provide defined benefits and those that are money purchase); and
• non-UK schemes (schemes that have their main administration outside the UK).

These regulations also include an amendment to The Occupational Pension Schemes (Scheme Administration Regulations) and the Personal Pension Schemes (Payments by Employers) Regulations 2000. This amendment extends the due date by which an employer must pay over employee contributions deducted from earnings to a pension scheme. The reason for this extension is to minimise the need for the scheme to refund contributions to the employer if the jobholder opts out by allowing the employer to keep the contributions until after the opt out period has passed.

These regulations also specify how TPR can determine that both employer and worker contributions are overdue for the purposes of issuing an unpaid contributions notice, which is a compliance tool that allows the regulator to seek to recover late or unpaid contributions.

* Update 29 January

Today the draft regs were replaced on the OPSI website by a new set, without explanation. While many of the large number of changes are trivial, involving page or citation references, others are less so. For example, the following definition has been added at the foot of Draft Reg 27 (information to be provided in relation to a jobholder affected by the transitional period for defined benefit and hybrid schemes):

"'the value' of contributions may be expressed as a fixed amount or a percentage of any qualifying earnings or pensionable pay due to the jobholder in any applicable pay reference period."

Interested parties may wish to take care they have the latest version of the draft regs.

In addition, the following three Statutory Instruments were laid yesterday:

The Employers' Duties (Implementation) Regulations 2010 (SI 2010/4) make provision as to how ss.2 to 9 of the Pensions Act 2008 ('the employers' duties") apply to employers. Those duties include the duty on an employer (under s.3) to make prescribed arrangements by which jobholders become active members of automatic enrolment pension schemes. These Regulations also set the transitional periods for money purchase and personal pension schemes (in reg 5) and for defined benefits and hybrid schemes (in reg 6). The regs come into force on 1 September 2012.

The Employers' Duties (Registration and Compliance) Regulations 2010 (SI 2010/5) make provision as to the powers that enable TPR to maximise compliance with the duties and safeguards contained in Chapter 1 of Part 1 and ss.50 and 54 PA 2008. These regs come into force on 1 October 2012.

The Public Interest Disclosure (Prescribed Persons) (Amendment) Order 2010 (SI 2010/7) amends The Public Interest Disclosure (Prescribed Persons) Order 1999 (SI 1999/1549, as amended by SI 2005/2464) by amending the entry in the Schedule in relation to the Pensions Regulator.

Section 47B of the Employment Rights Act 1996 provides a worker with the right not to suffer detriment, as a result of making a 'protected' disclosure. A qualifying disclosure is a protected disclosure by virtue of s.43A of the Act (inserted by section 1 of the Public Interest Disclosure Act 1998).

This Order amends the 1999 Order so that a disclosure to TPR about matters relating to the Regulator's objective of maximising compliance with the duties under Chapter 1 of Part 1 and ss.50 PA 2008 (and the safeguards in ss.50 and 54) PA 2008 will be a qualifying disclosure.

The Order will come into force on 1 October 2012.

All documents are accessible from the DWP pensions reform web page.