Government delays auto-enrolment company pension plan
Employment Law & HR update 27/01/2012
The Government has announced a two-year delay to the
introduction of automatic enrolment to its new company pension
plan, pushing it back for many workers until late-2018.
Pensions Minister, Steve Webb, announced the delay this week,
stating that it will now be fully phased in until October 2018. By
that time, all businesses – even small firms – will have to
contribute into pensions for their staff, with workers also
required to pay in a minimum contribution of around 4 per cent of
their salary.
Mr Webb cited the “exceptionally tough economic times” for the
delay to the reforms.
The previous timetable would have seen all workers who do not
have pensions automatically signed up to a company pension scheme
between October 2012 and September 2016. The delay is being offered
to smaller firms in particular, due to fears that the added
pressure of pension contributions could spell disaster for
companies that are already operating on the edge of solvency.
Mr Webb also pointed out that significant progress was being
made with the reform of the country’s state pensions. He explained
that the reforms would see the introduction of a new universal
pension payment, eliminating the means-tested pension credit and
the earnings-related Second State Pension.
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