Pensions Bill now an Act
The Pensions Bill has received Royal Assent. Through the Bill firms will automatically enrol staff into workplace pensions from next year.
From October 2012 employers will start to automatically enrol eligible workers into a qualifying pension scheme and contribute to that pension. Those automatically enrolled will also contribute to the scheme and get tax relief.
Measures such as allowing companies to defer automatic enrolment for up to three months, simplifying the scheme certification process, and greater flexibility on choosing the automatic re-enrolment dates will reduce red tape and cut costs.
As a result, the Pensions Act 2011 is expected to save employers around £170 million each year (in 2011/12 earnings) in contribution costs, £12 million in administrative costs in the first year and £6 million a year in ongoing administrative costs.
Pensions Minister Steve Webb said:
“We have addressed the concerns of business, with measures in law to slash bureaucracy and cut costs, saving them around £176 million each year. And we are bringing the reforms in gradually to give firms time to adjust.”
“Automatic enrolment will get millions saving, giving many low and middle-income workers access to a pension, with a contribution from their employer, for the first time in their lives.”
The Pensions Act 2011 also brought forward the increase in State Pension age to 66 by 2020, and women’s State Pension age in line with men’s to 65 by 2018, so that the State Pension remains sustainable for the future. The Government tabled an amendment to ensure no women would experience more than an 18 month increase to their State Pension age.
Read the Pensions Act 2011
