Workplace pensions – progress towards Automatic Enrolment

Posted on June 29, 2012 1 Comment

generic propecia×166.jpg” alt=”” width=”300″ height=”166″ />The eighth report of the Parliamentary Work and Pensions Select Committee, published in May 2012, focused on Automatic Enrolment (AE) in workplace pensions and the National Employment Savings Trust (NEST). There were a number of concerns and recommendations identified with implications for employers in the context of AE and NEST.

The Committee recognised that auto-enrolment would create new costs and administrative requirements for employers at a time of economic uncertainty and commended a flexible and gradual implementation process with employers’ needs in mind.

Equally the requirement to re-enrol individuals every three years was recognised as having administrative and cost implications for employers, although this was perceived as necessary to ensure high levels of participation in workplace pension saving. Given the concerns that employers’ representatives have expressed about the administrative implications of auto-enrolment, the Committee believed that it was important that The Pensions Regulator (TPR) takes the steps necessary to ensure that payroll providers are supporting employers towards a smooth transition to the new arrangements.

While understanding the calls from employers’ representatives for some exemptions to auto-enrolment, for example for micro businesses, the Committee believe such concessions would add to the complexity for employers, as well as having detrimental effects for employees.

It also considered that micro businesses and their employees had to date been the hardest group to reach in terms of workplace pension provision. The Committee supported the Government’s decision that auto-enrolment should apply to employers of all sizes.

The Committee saw that ensuring employer compliance was critical to the success of auto-enrolment and the programme could suffer reputational damage if a large number of employers were seen not to be fulfilling their duties.

The resources that the Government should make available for TPR to address non-compliance must reflect emerging evidence on employer awareness and compliance levels, particularly during the implementation phase for medium and smaller employers.

Relying on whistleblowing to identify non-compliance has inherent problems, particularly in respect of small firms, where the fact that a business has only one or two employees will make it impossible for the Pensions Regulator to guarantee anonymity to the person making a complaint. The TPR needed to consider very carefully how it would address this issue and whether it needed to use more proactive methods to check compliance amongst small employers. The Committee recommended that by the end of 2013, TPR provide a written update on its plans for dealing with

non-compliance among small and medium employers, drawing on its latest research on employer awareness and preparation.

The Committee recommended that the Government should also take steps to ensure that HMRC, the Health & Safety Executive and other relevant enforcement bodies would work closely with TPR to promote compliance, including sharing relevant information where employers are found to be in breach of their auto-enrolment requirements.


One Comment

  1. Angelos HR Webinars says:
    Thursday, July 19, 2012 at 12:34pm

    As you also mentioned, I think the TPR will probably have some potential problems regarding whistle blowing in small and medium businesses. Anonymity should be kept under every circumstance otherwise this ‘tool’ will not be used by employees. It would be very much appreciated if you could share your knowledge on the topic at an upcoming webinar on Auto-enrolment.
    Full webinar details:
    Registration link:



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