Reforms 'could complicate auto enrolment'

Posted On: 
16th January 2015

Payroll professionals have welcomed DWP's plans for technical changes to Automatic Enrolment but warned they must be introduced with "great care".

Millions of workers are being automatically enrolled into a workplace pension by their employer.

Chartered Institute of Payroll Professionals(
CIPP) consulted its members about the changes, but complained the DWP timescale for the consultation was too short, giving them six weeks, including the Christmas and New Year period, to respond.

CIPPmembers broadly agreed with the proposals to simplify processes.

However, genuine concerns remain that, unless great care is taken when forming the detailed processes, they will actually become more complicated rather than being simplified.

CIPPconsultation found that of all the proposals, there was least certainty about the minimum amount of information an employee should be given.

Less than two thirds agreed that required information could be given in one communication. There was more support for combining postponement information with 73% agreeing that this would reduce the burden on employers.

75% of respondents agreed it would be useful to give employees details of where to obtain an opt-out notice and 76% agree that the aspiration of communicating three pieces of information is realistic.

Opinion was equally divided as to the frequency of notice withdrawal and whether the exception should be extended to fixed-term contracts.

70% of respondents agreed with the proposal that employees who have recently cancelled qualifying scheme membership, whether new joiners or not and 72% agreed with the wide exception to automatically enrolling employees with tax protected status.

CIPPrecommends that the DWP continues with these proposals, but in close consultation with stakeholders to ensure the required simplifications are actually achieved, and giving a reasonable time for stakeholders to give careful consideration to any future proposals," said Helen Hargreaves from
CIPP's policy and research team.

The official

CIPP consultation response is available here