Staging dates tripled but no full contribution until 2018

A revised timetable that triples the number of staging dates for employers has been published by the Government today.

But the TUC has described as ‘disappointing’ the delay in the increase of employer contributions to 3 per cent to 1st October 2018, meaning employees will have had to wait 13 years after the Pension Commission’s report before they receive their full contribution.

The increase in the minimum rate of employer pension contributions from 1 to 2 per cent of banded earnings will be delayed from 1st October 2016 to 1st October 2017.

Large employers, those with 250 or more employees, will not face any change in the date they are due to start enrolling their staff. The latest employee staging date will now be 1st April 20117.

Aegon says today’s announcement by the DWP of a trebling of the staging dates for medium-sized employers, with between 50 and 249 employees is a pragmatic way to smooth out peaks of activity and ease the automatic enrolment process for this group.

A consultation and draft regulations with more detailed information will be published shortly.

Minister for pensions Steve Webb says: “Automatic enrolment will begin on time this October, taking up to 10 million people into pension saving, many for the first time ever, and all employers will be part of it.

“We have done all we can to ease any burden on business the reforms will bring and employers of all sizes now know the date they need to start enrolling their staff.”

TUC general secretary Brendan Barber says: “This is a deeply disappointing delay. Everyone agrees that we face a pensions crisis, with two out of three private sector workers not in any kind of workplace pension.
“Yet successive governments have delayed the introduction of auto-enrolment and the new system will not now be fully in place until three years after the next general election.

“Today’s announcement does not just hit the staff of small employers. What’s worse is that even workers auto-enrolled this year will now have to wait until the end of the staging process before they get their full contribution.
“This is because contributions are being phased in, with the final stage delayed until 2018 – thirteen long years after the Pensions Commission recommended auto-enrolment.
“It all adds up to a classic case of ‘make me good, but not yet’.”

Kate Smith, regulatory strategy manager at Aegon UK says: “Many employers in this category will have little or no experience of pensions and may need a great deal of ‘hand-holding’ to help them get to grips with auto-enrolment. The risk with fewer staging dates is that we could see peaks of activity from employers seeking help from advisers, Nest and providers. There will also be times when thousands of employers are trying to access the Pensions Regulator’s online system or use their helpline services at the same time.

“Increasing the number of staging dates is a welcome move which should reduce the operational strain on industry resources. This could make a big difference to how easy employers find it to get any help they need and hopefully make the auto-enrolment process a more pleasant experience for them and their employees.”