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Firms get three-month waiting period for auto-enrolment

Employers will be allowed to operate a 90-day waiting period before they need to auto-enrol staff into a private pension scheme after 2012.

As tipped by Money Marketing last month, this will be allowed in exchange for making higher contributions.

A defined-contribution pension scheme will need to have a total contribution of at least 11 per cent of a band of earnings, with the employer paying at least 6 per cent to take adv- antage of the three-month waiting period.

All other employers will need to start the auto-enrolment process the day an employee starts working for the company.

Employers using the personal accounts scheme will not be able to postpone auto enrolment.

Standard Life senior pensions policy manager Andrew Tully says: “This is good news for generous employers. The ability to postpone auto-enrolment for 90 days gives employers an incentive to make sure their pension contributions are at least 6 per cent of band earnings.”

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