The Government has extended the period new employees have to auto-enrol in a pension scheme from four to six weeks in a bid to ease the burden on employers.
In a series of changes to employer auto-enrolment rules, published today, the Department for Work and Pensions says it is trying to make life easier for firms as auto-enrolment rolls out to small and medium businesses in the next two years.
The deadline for employers to provide information to individuals on their opt in and joining rights has also been extended to six weeks. The deadlines for registration and postponement notices also fit with the extended joining window.
The extended deadline for passing worker contributions to a pension scheme applies to all new joiners, including contract joiners.
The opt out notice provisions will also make clear that schemes can customise notices.
DWP says extensions to the joining window will come into effect on April 1 2014 with other reforms such as bringing clarity to defined benefit schemes kicking on November 1 this year.
Standard Life has called for the FCA to scrap its pensions member pre-sale disclosure document for those auto-enrolled as it is not relevant when there is no active choice.
Pensions minister Steve Webb says: “Employers and our partners in the pensions and payroll industry have made a major contribution in delivering these landmark reforms since October last year.
“Now, one year in, we want to build on this success as medium-sized employers prepare to automatically enrol their staff into a workplace pension. These changes are aimed at streamlining the system and making it easier for employers to meet their duties.”
Federation of Small Businesses policy chairman Mike Cherry welcomes the extension to the joining period but warned auto-enrolment still needs to be “vastly simplified”.
He says: “Government cannot afford to be complacent. With millions of small and micro employers set to reach their staging dates in less than two years time, it is critical that this system is fit for purpose and simple to navigate for the smallest businesses.
“To ensure they do comply with their auto-enrolment duties, guidance around the rules will need to be vastly simplified and tailored to small firms who do not enjoy in-house HR or pensions experts.”