The Department for Work and Pensions, which released the measures, hope they will help businesses to manage their new duties. However, despite the clarification, findings from Punter Southall show that more than half of employers do not realise that their current contribution structure will not meet the regulatory requirements.
The changes, which stemmed from last year’s consultation, were revealed by Pensions Minister, Steve Webb. They include simplification of the certification processes and optional waiting periods.
Other amendments include allowing seafarers, offshore workers and police not under a contract of employment, to be covered by the legislation.
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He commented: “These regulations provide key legal requirements and guidance to help employers start enrolling their staff later this year.”
A revision that has been particularly welcomed is the definition of “basic pay” for certification requirements. It will now allow items such as commissions and certain allowances to be excluded.
Lee Hollingworth, Head of Defined Contribution (DC) at Hymans Robertson, said: “Without this amendment the certification process would have been wholly irrelevant for the vast majority of employers who do not currently deem a car and other allowances as pensionable.”
However, results from the DC survey illustrate that only 45 per cent of companies are aware of their staging date.
Alan Morahan, Head of DC Consulting at Punter Southall, said: “They know it’s coming but do they know how to adjust their contribution model, their communications and their understanding of the regulations to ensure they have in place something that is robust, resilient and fit for purpose?”
David Woodward, Chief Product and Innovation Officer at Ceridian, has issued a similar warning to employers.
He said: “While more than a third of large businesses, due to begin auto-enrolment from this autumn, believe it will take between four to 12 months to implement the systems needed for auto-enrolment, worryingly nearly two-thirds at this point do not appear to appreciate the sheer scale of the challenge ahead.”
