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Q&A: AUTO ENROLMENT

Q.WHAT IS THE EXISTING ARRANGEMENT FOR AUT0 ENROLMENT?

A.Currently, all employees will be automatically enrolled into a pension scheme from 2012. Those employees working for a firm that doesn’t provide a pension will be enrolled into the National Employee Savings Trust or Nest.

Q.WHY DO EMPLOYERS WANT NESTS RE-EXAMINED?

A.They are worried that the one-size-fits-all scheme could hurt some firms, especially smaller ones. Currently all employees will be enrolled in Nest, regardless of their age, salary, hours worked, start date or their firm’s turnover and profits. That could mean a big headache for employers’ in terms of contributions and red-tape. Many firms would prefer employees to have to opt-in, instead of the planned opt-out.

Q.WHAT IS THE SCOPE OF THE REVIEW INTO NESTS?

A.The minimum amount an employee must earn before they are automatically enrolled; the minimum amount they must contribute before they are enrolled; the age they must be before automatically joining the scheme; whether all firms should be forced to sign up to the scheme, regardless of size.