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Govt plans “emergency pause” for auto-enrolment

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The Government has drawn up plans to apply an “emergency pause” to the rollout of auto-enrolment to small and micro firms.

Ahead of a rapid increase in the number of firms hitting deadlines to enroll staff in schemes, the Department for Work and Pensions has plans in place to halt the programme if necessary, the Telegraph reports.

Earlier this month the National Audit Office published a report into workplace pensions which revealed there is a procedure in place to delay auto-enrolment “as a last resort” if the programme “was unable to cope”.

It adds: “The Department, The Pensions Regulator and Nest are continuing to develop the range of responses they might introduce if demand rises.”

TPR has had to use its compliance powers more frequently as the number of employers hitting their staging dates has grown.

Around 1.8m of the UK’s smallest and less resourced firms still have not begun enrolling staff in workplace schemes. Under current timescales the programme will be fully rolled out by 2018.

However, the NAO report also says the success of auto-enrolment is “exceeding many of the Department’s and The Pensions Regulator’s assumptions”.

It adds: “This is a positive sign that assumptions have been developed with a degree of challenge and caution.”

A DWP spokeswoman says: “As the NAO themselves have said, the rollout of automatic enrolment has been highly successful. The rollout is continuing as planned.”

The ability to apply an emergency pause was made available through the 2008 Pensions Act.

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. Oh yes! No surprise here! The pause is to allow these bureaucrats to scratch their heads while they realise that the small and micro firms are going to fight against this tooth and nail and there won’t be a lot the jobsworth’s can do about it.

    I was amused to see the latest advert for that banal ‘Workie’ where it is trying to persuade a garage owner to sign up. The film shows the garage owner ignoring the entreaty. Prescient or what! Odd sort of ad in the circumstance, though.

  2. Christopher Petrie 23rd November 2015 at 12:23 pm

    Mr Katz constantly denigrates legislation that is – for the first time ever – creating private pensions for poorer, working class people.

    Contrary to the naysayers, AE has so far been highly successful and welcomed by millions of people who have chosen not to opt-out from their workplace pension. Why retired middle class business owners would have such a downer on it is beyond me.

    • Mr Petrie. I suggest you see the other posts on this topic. I am by no means alone, but perhaps somewhat more trenchant in my opposition than others. From your remarks it might be fairly assumed that you have never run your own business. I don’t think it unfair to say that most entrepreneurs are not really happy with any legislation that gets in the way of them running their business. You might ponder several points in addition to the ones made by Trevor Harrington. What is better a job with no pension, or no pension and no job? It is not the place of business to be a benefits agency. If you run a business your prime obligation to your staff is to pay a competitive salary and provide a decent working environment. If the Government wants people to have a better pension – then raise taxes to pay for it – not just increase NI and then filch the money for other things. The UK pays the lowest state pension as a percentage of average earnings in the whole of the OECD – and that now includes Mexico. We are not even as good as a third world pension provider. Ruminate on that before being keen to burden private business with more red tape.

  3. Mr Petrie I do not believe Harry means to denigrate the legislation as such, rather the unnecessary and highly bureaucratic hoops an employer, whatever their size, has to jump through in order to meet their AE legislative requirements.
    AE is a perfect example of a piece of legislation that attempts to improve the lot of the masses (forgetting the self employed: Who?) which has been suffocated by bureaucrats making sure they are then able to justify their salaries and therein gold plated pensions.

  4. Trevor Harrington 23rd November 2015 at 5:48 pm

    An individual’s contribution is too small to allow for a viable fee, or commission, to be charged by advisers, who need to make a profit – we do not work for free, and neither does anyone else.

    Nest is now discovering these basic economics, (about which they have been told many times by our profession), that these small individual schemes are not financially viable, and neither are even the limited number of members inside them, unless one can deal with them all collectively and cross subsidise.

    We are not allowed to cross-subsidise as the regulator deems this to be unfair.

    The ordinary people buying the product through AE, quite correctly see it as just another tax, currently voluntary, which is being used to create yet another pension …. which they won’t get anyway, as it will be taken off them just before they get to retirement …. like the state pension has been …. like the company pension has been ….. like the private personal pension has been.

    I would like to give you some advice Mr Client …. you remember your state pension …. the one you have been paying compulsory NI contributions into for the last 40 years?
    Yes that’s right, the one they increased your NI contributions to in 1978 and more recently too. Yes that’s right, the one you were promised at age 65 and age 60 for your wife.
    Yes that’s right, the one that has just been pushed out to both your ages 67.
    Yes that’s right, you have lost 7 years income for your wife and two years income for you.
    Yes that’s right, you will only get £155 per week rather than the £250 per week previously thought.
    Yes that’s right, you wife will only get that amount too.
    Yes, you are right, most people in the public sector still get their pensions at age 60 … even earlier for national and local politicians.

    OK … so we know which pension is the Government led state pension.

    Would you like another one … this AE scheme is run by them too ….

    Client response ….. “XXXX off!”

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