UK - Educating and enabling employers to comply with new duties will be the key focus for The Pensions Regulator (TPR) over the next two years, ahead of the introduction of auto-enrolment in 2012.
TPR has been charged with ensuring all employers adhere to the new rules, such as auto-enrolment and minimum levels of contributions. So Charles Counsell, programme manager for the organisation's Employer Compliance Regime (ECR), said the key thing will be to help employers and their advisers to "do the right thing".
"It's clearly a huge shift, particularly for small and micro employers who might not have had much to do with pensions so far. They face a big learning curve so it is crucial for us to help them understand what they have to do," said TPR's Counsell.
Once the draft regulations have been laid before Parliament, as expected early next year, TPR will have more certainty regarding the details of the reforms and employer duties. In April 2010 it plans a "small revamp" of its website to include general information about the changes before a full relaunch in July 2010 - including tools such as decision trees - to coincide with a targeted campaign at pensions advisers and some large employers.
TPR is expecting small and micro employers to turn to financial advisers first, while large employers will take longer to get processes into place so they are being targeted early starting in September 2010. TPR will then turn its attention from October 2011 to employers of all sizes.
This will include working with associations and employment bodies, such as the Confederation of British Industry (CBI), to identify the best ways to engage employers and setting out what, how and when employers need take action. TPR issued a tender last month to find an agency to provide 'ECR propositions development and research' so officials might gain a detailed understanding of what motivates employers and intermediaries to "take appropriate action" ahead of the 2012 reforms.
Meanwhile, TPR is also attempting to make the registration process for the new duties as smooth as possible through consultation with stakeholders and test runs, as around 1.4 million employers will be affected by the reforms.
Counsell explained that employers will be required to register with TPR shortly after their duty date arrives to explain what arrangements they have made. The regulator will have information on every employer through the PAYE system from HMRC, so in addition to pre-duty reminders it will also write to those employers that have not registered.
TPR said failure to register may be seen as an oversight as it is "human nature" to leave things to the last minute, but warned it will get more specific after the initial letter has been issued and will follow-up those employers who have made no response, which could lead to "hard action" such as a compliance notice or penalty notice.
Despite the TPR's activity, the NAPF has urged the government to make the registration process more flexible for employers, including a registration period of three months after the duty date to allow them to collate information following the end of the opt-out period. (See earlier IPE article: NAPF calls for working group to assist DWP regs)
TPR is engaged in ongoing consultations with stakeholders, lobby and consumer groups to build a consensus and awareness of the rules, which in turn provides a whistle-bowing capacity. It claimed the stronger the consensus about how the ECR works "the far less we will have to worry about the enforcement element if people choose not to comply".
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