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Update on Auto-enrolment and State Pension Reform
by Ian Neale and Steve Rideout 16/12/2011
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In the House of Commons on 28 November, Minister for Pensions, Steve Webb announced a partial delay to the programme of staging dates for auto-enrolment, such that
"small businesses will not have to start enrolling their workers until the start of the next Parliament. . . . In terms of certainty, everybody who was due to be enrolled this side of July 2013 will see no change in their dates, and we will publish early in the new year the revised schedule. I entirely agree that certainty is needed, and I can confirm that there will be no further changes to the timetable."
A DWP press release on the same day confirmed that "small businesses" meant firms with fewer than 50 employees. It went on to say that "under the revised timeline, small businesses would begin automatically enrolling their staff in May 2015, instead of the current timing of April 2014", to give them more time to prepare: "breathing space".
The Government announcement was both preceded and followed by intense press speculation (see eg Money Marketing), but as the BBC noted, only two details are clear:
- no employer with fewer than 50 staff in their PAYE scheme on 1 April 2012 will have to comply before May 2015; and
- it will now be later than September 2016 before all employers are on board.
(It is also a relevant fact that legislation has already determined the date of the next general election will be Thursday 7 May 2015.)
We must wait until January for clarification of what exactly is to happen. Uncertainty arises from the Government's statements themselves. For example, the legislation which sets the staging dates, SI 2010/4 Reg 4 (coming into force on 1 September 2012) presently requires the first group of "small" employers to begin auto-enrolment on 1 March 2014, not 1 April.
Another point concerns the groups of employers whose staging dates are also apparently to be postponed, to a date between July 2013 and May 2015. Taken at face value, the Minister's reference to "this side of July 2013" means only employers with over 4,000 in their PAYE scheme on 1 April 2012 will still be obligatorily staged in before 1 July 2013: the date on which employers with between 3,000 and 3,999 are supposed to enter the programme. Confusion exists, however, about whether the Government intends this latter group to be delayed or not.
For more details on this and State Pension reform, Aries Members login here.
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