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04 Apr 2013

DWP Consults On Plans To Simplify Auto-Enrolment Rules

The Department for Work and Pensions (DWP) has come up with proposals that are intended to streamline automatic-enrolment rules and has launched a consultation on the matter that will run until next month.

DWP is asking employers and pension and payroll providers to send responses about the proposed changes by 7 May 2013.

One of the purposes of the amendments is to make it easier for firms to define who is eligible for auto-enrolment by using data gathered through existing payroll systems. This will result in a change to the definition of the “pay reference period” in order to align the definition with standard periods.

The DWP also aims to simplify legislation for firms that are yet to reach their auto-enrolment staging date but already automatically enroll staff into a pension scheme which covers the minimum standards determined by the government. Currently, if a worker decides to opt out of such a scheme, the employer is obliged to re-enrol them when their staging date comes around.

The DWP is also looking to simplify the rules for companies who have not reached their auto-enrolment staging date but already automatically enrol their workers into a pension scheme which meets the minimum standards set by the Government.

Another possible change is exempting workers who have voluntarily opted out of their employer´s pension scheme within 12 months of the employer´s staging date. The DWP also considers extending from one month to six weeks the “joining window,” i.e the period within which an employer must automatically enrol a worker into a qualifying pension scheme after they become eligible or opt-in. Among the proposals is also exemption for workers with fixed or enhanced protection from auto-enrolment.

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