More than 100 employers around the UK have agreed to enrol some of their staff in the new national top-up pension scheme known as Nest – the National Employment Savings Trust.
Employers will not be formally obliged to begin the phased enrolment of their staff in Nest until October 2012.
If they already run a decent pension scheme, then all staff can be automatically enrolled in that instead.
But in a “soft launch” that began in July this year, a variety of small, medium-sized and large employers have volunteered to start the Nest process.
This will gradually ramp up activity, so that the Nest system will be absolutely ready come October next year.
So, how is it going?
“It’s going pretty well,” said Tim Jones, the chief executive of Nest.
“What is happening here is probably the single biggest implementation of behavioural economics, certainly in the financial sector, that’s been done yet.”
The basic facts
Automatic enrolment, either into Nest or an existing company scheme, begins in October 2012 and will apply to workers who:
are at least 22 years old but below their state pension age
earn more than £7,475 a year
Minimum contributions will be paid on their earnings between £5,035 and £33,540.
Employers will start paying a minimum of 1% of qualifying earnings, rising to a minimum of 3% by 2017.
Employees will start paying a minimum of 1% of their qualifying earnings, rising to a minimum of 5% by 2017.
The process of employers joining Nest and automatically enrolling their staff to it – or to their own pension scheme – will start with big and medium-sized employers between 1 October 2012 and July 2014.
Small and micro employers will have to join in the process between August 2014 and February 2016.