While the full proposals include reforming the State Pension to make it simpler and more generous, and extending people’s working lives, the key reforms for employers relate to the Government’s ideas for making it easier for more people to save for retirement.

Between 2012 and 2016, employers will have to automatically enrol all eligible workers in a qualifying pension scheme and make contributions to their plan.

The Government estimates that about seven million people are currently under saving for retirement. As a result, it is putting the onus on employers to help encourage more people to save:

• You’ll be required to automatically enrol all eligible workers* into any ‘qualifying pension scheme’. This could be your own Company Scheme if it meets certain criteria or NEST (National Employment Savings Trust) a simple, low-cost pension scheme being introduced by the Government and administered by Tata Consultancy Services (TCS).
  
• You’ll be required to contribute at least 3% of each worker's eligible earnings which is intended to incentivise them to join. Their own contributions and tax relief will be added to this to meet a minimum 8% contribution rate.

The Government recognises that these reforms continue to place employers at the heart of pension provision and that they can be successful only with your support.

It is therefore proposing key measures designed to minimise the burdens on you:

• Compulsory employer and workers contributions will be phased in.
• Simple delivery model for NEST.
• Simple, straightforward, qualifying criteria for existing Company Schemes, meaning many existing schemes will meet them, perhaps with minor changes.
• A ‘light-touch’ but effective compliance regime for new employer duties such as automatic enrolment.

* A 'worker' is a wider category than just employees and can include some contractors or agency workers. As a general rule, if you have to pay the national minimum wage to someone or they are working under an apprenticeship, they are a worker.