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DWP – New Timetable Clarifies Auto Enrolment Dates
Monday, February 6th, 2012
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The Employers’ Duties (Implementation) Regulations 2010 provides how the auto-enrolment responsibilities under the Pensions Act 2008 will apply to employers. Specifically, it outlines the auto-enrolment staging dates.
On 25 January 2012, the DWP published a revised timetable of staging dates for auto-enrolment. This was not altogether unexpected, given their announcement in November that the dates for small employers (49 employees or less) was to be put back and that further details would be provided in January. This January 2012 announcement affects only employers with less than 250 employees.
This means that the current staging calendar can be disregarded and the situation after the 25 January announcement is as follows:
- Auto-enrolment will still go ahead for ALL employers, regardless of size
- The Ministerial Statement confirmed that all employers with an existing staging date of 1 February 2014, or before, are unaffected
- Medium-sized employers (50 – 249 employees) will be allocated revised staging dates between 01 April 2014 and 01 April 2015
- There will be a test tranche of employers with less than 30 employees which will be piloted between 01 and 30 June 2015
- Small employers (30 – 49 employees) will be allocated staging dates between 1 August 2015 and 1 October 2015
- Small employers (1 – 29 employees) will be allocated staging dates between 1 January 2016 and 1 April 2017
- Employers without PAYE schemes and new employers will be allocated staging dates between 1 April 2017 and 1 February 2018, with new employers from October 2017 having an immediate auto-enrolment liability
Based upon the above information, the staging calendar is revised as follows:
| Staging Date Schedule | |
| Employer Size (by PAYE Scheme) | Staging date |
| 120,000 or more | 1 October 2012 |
| 50,000 – 119,999 | 1 November 2012 |
| 30,000 – 49,999 | 1 January 2013 |
| 20,000 – 29,999 | 1 February 2013 |
| 10,000 – 19,999 | 1 March 2013 |
| 6,000 – 9,999 | 1 April 2013 |
| 4,100 – 5,999 | 1 May 2013 |
| 4,000 – 4,099 | 1 June 2013 |
| 3,000 – 3,999 | 1 July 2013 |
| 2,000 – 2,999 | 1 August 2013 |
| 1,250 – 1,999 | 1 September 2013 |
| 800 – 1,249 | 1 October 2013 |
| 500 – 799 | 1 November 2013 |
| 350 – 499 | 1 January 2014 |
| 250 – 349 | 1 February 2014 |
| 50 – 249 | 1 April 2014 – 1 April 2015 |
| Test Tranche less than 30 | 1 June 2015 – 30 June 2015 |
| 30 – 49 | 1 August 2015 – 1 October 2015 |
| Less than 30 | 1 January 2016 – 1 April 2017 |
| Employers without PAYE Schemes | 1 April 2017 |
| New Employers April 2012 – March 2013 | 1 May 2017 |
| New Employers April 2013 – March 2014 | 1 July 2017 |
| New Employers April 2014 – March 2015 | 1 August 2017 |
| New Employers April 2015 – December 2015 | 1 October 2017 |
| New Employers January 2016 – September 2016 | 1 November 2017 |
| New Employers October 2016 – June 2017 | 1 January 2018 |
| New Employers July 2017 – September 2017 | 1 February 2018 |
| New Employers October 2017 and onwards | immediate |
The Statement also advises a delay in the phasing of contributions from 1% to 2% of the Qualifying Earnings Band (QEB) by one year for money purchase and Personal Pension schemes. This ‘Phasing Date’ moves from 1 October 2016 to 1 October 2017, with the ‘Steady State Date’ moving a year to 01 October 2018. This is the date by which employer contributions must be 3% of QEB.
This can be represented as follows:
| Money Purchase and Personal Pension Schemes | |||
| Minimum Contributions (Percentages of earnings in the QEB) | Transition Periods | From October 2018 | |
| July 2012 to October 2017 | October 2017 to October 2018 | ||
| Employer contributions | 1% | 2% | 3% |
| Total contributions | 2% | 5% | 8% |
Comment
We await the revised consultation document and draft regulations which will detail the new staging dates. It appears as though the number of dates will increase, and this is surely welcome news which will help employers and The Pensions Regulator ensure a smooth transition. Let us not forget that this is a huge administration exercise. Joanne Segars, Chief Executive of the National Association of Pension Funds (NAPF) said they were ‘pleased that the Government has spelled out a new timetable’ in order to ‘provide the clarity that businesses need to get on with preparing for these important changes’.
At the same time, however, it must be said that this is not welcome news for all. This is despite DWP’s assurance that, by the end of this Parliament, 70% of workers will be auto-enrolled under the new set-up compared to 75% under the old. TUC General Secretary Brendon Barber referred to this ‘deeply disappointing delay’ and that, by the time full employer contributions are phased in in 2018, it will be 13 years since the Pensions Commission recommended auto-enrolment. This affects all employees working for any sized employer. NAPF acknowledged that ‘there have been too many delays already’.
We concur, as we did in November, that this change does seem to impact negatively on employees who are not saving for the retirement. This is quite the reverse of the original intention of auto-enrolment. Now we have another consultation to look forward to!
Further, does this mean that the minimum contribution levels for certification in a money purchase / personal pension scheme have been pushed back as well? Does this also defer auto-enrolment for existing employees into a defined benefit scheme? We are assuming that the consultation document will contain all the answers as there is nothing from DWP or TPR on this – unless you know different.
Further Information
- DWP Ministerial Statement 25 January 2012 – Changes to the automatic enrolment timetable
- DWP Website 25 January 2012 – Press Statement
- Press Release 25 January 2012 – NAPF Website
- Press Release 25 January 2012 – TUC Website
