Pension auto-enrolment education process begins

There is now just over one year to go before the phasing in of the new employer's duty to automatically enrol eligible jobholders in a qualifying pension scheme. Consequently, the Pensions Regulator and the Department for Work and Pensions (DWP) have embarked on a publicity and education programme to try to ensure that employers are fully prepared to meet their obligations.

On this page:
Basic guides
Checklists provided
Detailed information
DWP leaflet
Online tool to come.

One snag is that the Pensions Bill, which contains amendments to the auto-enrolment regime, is still going through the parliamentary process. The regulator seems to have prepared the guidance on the assumption that the recommendations of the automatic enrolment review will not be changed before they are enacted.

Basic guides

To ease in employers gradually, the Pensions Regulator has published a variety of material including three short guides. One is an overview of all of the new employer duties, which, in addition to auto-enrolment, are: to make contributions on workers' behalf; register with the Pensions Regulator; and communicate with workers about the changes and how they will be affected by the new regime. It also mentions the prohibition on employers offering eligible workers inducements to opt out.

The first guide (PDF format, 797K) (external website) briefly considers the need for employers to assess their workforce and identify who will need to be automatically enrolled. It also highlights the need to choose a suitable pension scheme, outlines the criteria that the scheme needs to meet, and refers to the administration and notice procedures for both opting in and opting out.

Checklists provided

The second (PDF format, 523K) and third (PDF format, 50K) (external websites) guides are different versions of the same thing. Both set out a five-step action checklist to highlight the key steps that will need to be undertaken so as to prepare for the introduction of auto-enrolment. One is specifically targeted at larger employers and the other at trustees. The five listed actions for employers are:

• to know the staging date from which the new duties apply, which is based on the number of people in the employer's largest PAYE scheme;
• to start the planning process, for example by assessing the workforce and reviewing pension provision;
• to brief key management personnel;
• to mobilise an implementation team; and
• to communicate the changes to all staff.

To help employers find the date from which the new duties apply to them, the regulator's website has details of the staging dates. There is also other material, but it is incredibly badly organised and terribly hard to find.

In addition, the regulator is writing to nearly 600 of the largest organisations alerting them to their new duties. It plans to eventually send at least two letters to every employer in the country as each approaches its staging date.

Detailed information

If employers gain the impression from the short guides that operating automatic enrolment will be a walk in the park, they will be quickly disabused of the notion when they turn to the detailed guidance. The explanation of the automatic enrolment process (PDF format, 225K) (external website) is one of nine guides ranging in length from 10 to 30 pages.

Before tackling the main auto-enrolment guidance, employers are informed that they must have read the first three publications in the series, which describe the new duties in general terms and explain how to prepare for the changes and identify categories of worker. The regulator also recommends that they read the fourth guide, which details the criteria that must be met by qualifying pension schemes. The later guides in the series cover such matters as opting out and opting in, and record-keeping.

The guide to automatic enrolment sets out all the stages that the employer must go through to fulfil its duty. It is written in clear English but there is a lot of cross-referencing to the other guides, which some readers may find frustrating. Particularly helpful are the two flowcharts that illustrate example processes for occupational and personal pension schemes. The guidance also includes a list of the information that must be given to eligible jobholders and a detailed explanation of the transitional arrangements that apply to defined-contribution and hybrid schemes.

DWP leaflet

The DWP added to the education process by issuing its own leaflet (PDF format, 168K) (external website) explaining the changes. This sets out the reasons for the introduction of the reforms. It also outlines very briefly the basic facts about automatic enrolment and contains examples illustrating which workers should, and which need not, be auto-enrolled. The contribution rates that will apply are included and guidance is offered on choosing a suitable pension arrangement. A useful aspect of this guide is that it clearly sets out the changes to the auto-enrolment regime contained in the current Pensions Bill.

Whereas much of the Pensions Regulator's guidance is particularly targeted at larger employers, this leaflet is aimed at all employers.

Online tool to come

The Pensions Regulator is planning to help smaller employers who have not previously been involved very much with pensions by introducing online interactive tools on the new duties.