From 2012, unless you are already operating a Company Scheme that meets the required criteria, or you set one up, you will have to enrol each eligible employee into a Personal Account.

Personal Accounts are intended as a vehicle for lower earners who don’t have access to a good Company Scheme. They are designed to be a simple, low-cost way for these individuals to save, and will have a number of features that ensure they remain suitable for these individuals.

• Low charges.
• A limited choice of investment funds and a default fund for those who do not make a choice.
• An annual contribution limit of £3,600 a year (increased with earnings from 2005).

They will operate as a National Pension Savings Scheme - a single organisation with a Personal Accounts Board responsible for providing all Personal Accounts, offering fund choices and appointing suitably qualified independent fund managers.

The day-to-day administration of Personal Accounts (now known as National Employment Savings Trust - NEST) will be handled by Tata Consultancy Services (TCS). Other Company Schemes will be regulated by the Pensions Regulator.

What this means for you?

On the face of it this could appear to be a good thing. Collection of contributions is expected to be aligned with common payroll processes, and much of the administration involved in running your own scheme would be removed.
If you are operating a Company Scheme and wanted to close it in favour of this, you would have to check the contractual rights your employees had before doing so.

However, contractual rights apart, it should be noted that these Personal Accounts are unlikely to have as much appeal to moderate and higher earners, or to employees looking for a greater degree of choice and higher contribution levels. Keeping or setting up your own qualifying scheme could be a more effective benefit and retention tool for a broader range of staff.