The DWP published its final response to consultation on workplace pension reform this week, but has admitted that it must rework rules for alternative DC schemes with the help of stakeholders and the pensions industry.
A spokesman says: “Reaction to the consultation said proposed regulations just didn’t work, so we have bulldozed them out and go away, start again and see what we can come up with to better do the job.”
It says interested parties met this month to begin writing a new set of rules for certified DC schemes. It says there is currently no deadline for the new set of rules.
The DWP has also amended the rules to postponement whereby if an employer is offering a good scheme the employee can postpone auto-enrolment for three months before making a decision. The spokesman says: “We want to protect existing, good quality pension provisions.”
Other changes include a reduction in fixed penalty fine for non-compliance of £400 rather than £500.
The DWP also revealed that the Personal Accounts Delivery Authority will cease to be from July 5 and will become Nest Corporation, the trustee for the personal accounts scheme.
It says the next step is to begin implementation of auto-enrolment, which will begin with a “major” consultation into how employers and employers are informed about the changes and repercussions of auto-enrolment.
Auto-enrolment will begin October 12, 2012 for the biggest firms in the UK employing more than 120,000 staff and will finish in October 2016.
The DWP will use the start of each month to inform the next smallest group of firms on that date that they must auto-enrol employees. It will also be aiding employers by creating an online system whereby firms can enter their names and be given a final deadline for auto-enrolment.
Trade Union Congress general secretary Brendan Barber says: “This is a major step forward in building a new and progressive pensions system.
“Millions of workers who have never had the chance to build up their own pension will now start to save. While no lobby group will have got everything they wanted today, we all have got a workable and balanced set of rules for the new system.”