DWP releases revised timetable for AE staging dates - UPDATED

The revised timetable of staging dates for auto-enrolment has been released by the Department for Work and Pensions.

A ministerial statement confirmed all employers with an existing staging date of on or before 1 February 2014 are unaffected.

It added medium sized employers will be re-allocated staging dates between 1 April 2014 and 1 April 2015 - in some cases this means a delay of nine months. However, pensions minister Steve Webb added about 70% of workers will be automatically enrolled before the end of this parliament, compared to about 75% under the previous set up.

Small employers will be allocated automatic enrolment dates between 1 June 2015 and 1 April 2017.

Webb added: "We plan to publish a consultation document on the detail of these changes shortly. Draft regulations and an impact assessment will be published alongside the consultation document."

The statement also revealed the government plans a one year delay in the increase in the minimum rate of employer pension contributions - from 1% to 2% banded earnings - from 1 October 2016 to 1 October 2017.

Contributions will increase to 3% from 1 October 2018.

The government announced it would be delaying auto-enrolment dates for small and medium sized businesses in November, last year (PP Online, 28 November). Webb said the move was initiated to give such firms "additional breathing space to prepare for the reforms while operating in tough economic times".

Life and pensions firm Aegon said the staging dates for medium-sized employers (employing between 50 and 249 people) had been trebled.

Aegon said the change was a pragmatic way to smooth out peaks of activity and ease the compliance process for these companies.

Regulatory strategy manager Kate Smith said: "Many employers in this category will have little or no experience of pensions and may need a great deal of ‘hand-holding' to help them get to grips with auto-enrolment.

"The risk with fewer staging dates is that we could see peaks of activity from employers seeking help from advisers, NEST and providers. There will also be times when thousands of employers are trying to access The Pensions Regulator's online system or use their helpline services at the same time."

However, she added increasing the number of staging dates was a welcome move which should reduce operational strain on industry resources.

"This could make a big difference to how easy employers find it to get any help they need and hopefully make the auto-enrolment process a more pleasant experience for them and their employees."

DWP figures indicate that about 28,000 employers and more than 1.7 million potential employees for auto-enrolment will be affected by the increase in the number of staging dates.

The TUC was unimpressed with the new dates. TUC general secretary Brendan Barber said the delay was "deeply disappointing".

He explained: "Everyone agrees that we face a pensions crisis, with two out of three private sector workers not in any kind of workplace pension.

"Yet successive governments have delayed the introduction of auto-enrolment and the new system will not now be fully in place until three years after the next general election."

He said the deferral did not just hit staff working for small employers.

"What's worse is that even workers auto-enrolled this year will now have to wait until the end of the staging process before they get their full contribution.

"This is because contributions are being phased in, with the final stage delayed until 2018 - thirteen long years after the Pensions Commission recommended auto-enrolment."

National Association of Pension Funds chief executive Joanne Segars added: "Now the government needs to stick to the new timetable and avoid last minute changes that will undermine the success of the reforms. There have been too many delays already."

New start-ups (from 1 April 2012 and up to and including 30 September 2017) will have automatic enrolment dates between, and including, 1 May 2017 and 1 February 2018.

Any new employer setting up from 1st October 2017 onwards will be required to comply immediately if paying earnings which attract PAYE deductions in respect of any worker.

Revised AE dates for all employer sizes

Source: DWP