Steve Webb, Minister for Pensions, has today accepted in full the review of automatic pensions enrolment, including a three month waiting period for agencies before they need to auto-enrol temporary workers.
This is something for which the REC has consistently called for in its continuing discussions with Government and it is an important win that will help reduce the administrative burden for the recruitment industry.
The REC's ongoing campaign has highlighted the practical issues that auto-enrolment for temporary staff raises as well as the administrative implications for providers of temporary and contract staff.
Commenting on the review, Tom Hadley, the REC’s Director of Policy and Professional Services, said:
The need for people to save more for their retirement is well understood. However, the challenge is to find a workable system that reflect different ways of working and that limits the bureaucracy for recruiters. We are delighted that the review took on board the majority of our suggestions.
This announcement is a welcome step in the right direction. The recruitment industry must be allowed to focus on what it does best - providing opportunities for job seekers and high levels of service to business.
The REC will continue to work closely with the government to seek clarity on particular points, in particular guidance on anti-avoidance measures and the importance of a common staging date for all recruitment businesses regardless of payroll size due to the distortion this creates in the recruitment market.
The full recommendations published today include:
The National Employment Savings Trust (NEST) will go ahead as planned (the government created pension scheme) to aid with implementation, with an emphasis on targeted communication to micro employers of its existence.
The Department for Work and Pensions to accept responsibility for the future liabilities of NEST. Previously it was unclear if agencies would be held responsible even if they used this government scheme.
An optional waiting period of up to three months for agencies before they need to auto-enrol temporary workers. Agency workers can however opt-in during this period.
The phasing in of recruitment businesses to the scheme based on payroll size will still go ahead, with the largest agencies going first, however the recommendations include a provision for these large agencies to phase in voluntarily from July 2012, four months before the scheme becomes compulsory in October 2012.
The flexibility of when to re-enrol agency workers who have opted out, recruitment businesses will be given a six month window in which to re-enrol workers who want to opt-in.
New legislation to state clearly that the annual NEST contribution cap of £3,600 will be removed in 2017, as opposed to just a review in 2017. This removes the need for recruitment agencies to check the previous contributions made by agency workers through other routes (e.g. other recruitment agencies or permanent employment).
To find our more about the REC's work on the Pensions Act 2008, visit http://www.rec.uk.com/about-recruitment/externalrelations/campaigns/pensions
