Information for participants: the Workplace Pension Reforms and the Pensions Act 2008
The Pensions Act 2008 introduced workplace pension reforms aimed at encouraging greater individual private pension saving.
From October 2012 all employers will be required to automatically enrol all their employees, aged between 22 and State Pension age who are earning above the annual earnings threshold into a qualifying workplace pension scheme.
Those jobholders not wishing to save will be able to choose to opt out after they have been automatically enrolled.
Automatic enrolment will be introduced over a 48-month period from October 2012 to October 2016 depending on the size of the employer; starting with the largest employers first, through to the smallest.
Employers will be able to choose the pension scheme(s) they want to use to fulfil their new duties provided the scheme(s) meet certain quality criteria. Where the employer chooses to provide a money purchase arrangement, there will be minimum contribution requirements which will be phased in to help both employers and individuals adjust to the additional costs gradually. Minimum contributions require a total of eight per cent of earnings within a set earnings band, with at least three per cent coming from the employer.
A compliance regime enforced by The Pensions Regulator will be in place to ensure employers and others meet their new duties and workers get their new rights.
A new workplace pension scheme called NEST (National Employment Savings Trust) has been set up. NEST will be a qualifying pension scheme open to any employer who wants to use it to meet their duties.