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DWP releases revised timetable for auto-enrolment staging dates
Practical Law UK Legal Update 7-517-4591 (Approx. 4 pages)
DWP releases revised timetable for auto-enrolment staging dates
by PLC Pensions
| Published on 25 Jan 2012 • United Kingdom |
The DWP has issued a revised timetable of auto-enrolment staging dates containing details of a delay in the dates applying to "small businesses". (Free access).
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The DWP has issued a revised timetable of staging dates for auto-enrolment which contains details of a delay in implementing staging dates for "small businesses" proposed on 28 November 2011 by the pensions minister, Steve Webb. All employers with an existing auto-enrolment staging date on or before 1 February 2014 will be unaffected. Medium-sized employers will be re-allocated staging dates between 1 April 2014 and 1 April 2015 and small employers will be allocated staging dates between 1 June 2015 and 1 April 2017. A consultation document setting out the detail of these changes, will be published shortly, together with draft regulations.
In a statement to the House of Commons on 28 November 2011, the pensions minister, Steve Webb, announced a delay in implementing staging dates for "small businesses"; apparently meaning employers with fewer than 50 employees. However, he confirmed that auto-enrolment would still apply from October 2012 to all employers. He promised to publish a revised timetable in early 2012. (See Legal update, Auto-enrolment delay for small businesses.)
On 25 January 2012, the DWP published the revised timeline for auto-enrolment in a written ministerial statement to the House of Commons. This confirmed that:
- All employers with an existing staging date on or before 1 February 2014 will be unaffected.
- Medium-sized employers will be re-allocated auto-enrolment dates between 1 April 2014 and 1 April 2015, a delay for some employers of up to nine months.
- Small employers will be allocated auto-enrolment dates between 1 June 2015 and 1 April 2017.
- New employers setting up business from 1 April 2012 and up to and including 10 September 2017, will be allocated auto-enrolment dates between, and including, 1 May 2017 and 1 February 2018.
- New employers setting up business from 1 October 2017 onwards, will have an immediate duty to apply automatic auto-enrolment if they pay earnings which attract PAYE deductions.
- The proposed increase in the minimum rate of employer contributions from 1% to 2% of banded earnings will be delayed from 1 October 2016 to 1 October 2017.
- The employer contribution rate will then increase to 3% from 1 October 2018.
A consultation document on the detail of these changes, plus draft regulations, will be published shortly.
The new timetable has largely been welcomed by the pensions industry as it provides clarity for businesses but others, including trade union leaders, have commented that the delay in fully implementing auto-enrolment will affect employees who have little or no pension savings.
For more information on auto-enrolment, see Practice note, Auto-enrolment and new employer pension duties: overview.