DWP closes auto-enrolement loophole
A "significant" loophole that would have allowed employers to postpone auto-enrolment until 2017 has been closed by the Department for Work & Pensions.
Pensions Minister Steve Webb said it was "vital that forms comply with the spirit as well as the letter of the law". The wording of the Pensions Act 2008 was meant to allow employers to postpone enrolling staff until 2017 if the hybrid scheme's regime made the phasing-in of contributions impossible.
The department said in a statement: "An amendment to the Pensions Act 2008 will tighten the rules, ensuring that only employers offering defined benefits to a jobholder – whether in a defined benefit or hybrid scheme – will be able to defer automatic enrolment until 2017." It added that all eligible employees who did not have access to a Defined Benefit fund should be enrolled from the company's staging date, without delay. Webb said the change sent a "clear message" that all workers should be allowed to begin saving into their pension as soon as possible.
"With more and more of us living longer, starting early to build a decent pension pot is more important than ever," he said.
Steve Yardley, Director of Temporary and Contract Recruitment at JGA Recruitment comments " This latest development is another example of the challenges companies face in interpreting the Auto Enrolment legislation and being drawn away from day to day payroll work loads and pension processing. We see increased demand for auto-enrolement experts and implementation consultants who can facilitate change in organisations effectively.