As part of The Pensions Regulator's fifth Automatic Enrolment Annual Commentary and Analysis Report, The Pensions Regulator have set out what they think are the major trends and challenges for auto enrolment over the next few years. We take a look at some of the main ones.
The Pension Schemes Act
The Pensions Regulator has welcomed the new powers that have been granted to them in April to authorise and supervise master trusts. The number of providers has grown significantly over the last few years as more staff are put into schemes thanks to auto enrolment. This means that there is a need for their savings to be secure. The regulations under the Act are still being developed but will give The Pensions Regulator powers to ensure that master trusts are run by individuals who are fit and proper and that they are financially secure and stable.
Phasing Of Contributions
Under auto enrolment, contributions will be increased gradually over time. From 6 April 2018, the minimum amount an employer will have to pay in will be 2% of a worker's pay, and the amount the worker will put in will rise to 3%. On 6 April 2019, this will rise again to 3% from the employer, and 5% from the worker. The Pensions Regulator has said that they will be doing everything that they can to ensure that employers know about these increases as well as providing them lots of support and guidance.
The Gig Economy
The way we work in the UK is changing dramatically, and one of these changes is the rise of the gig economy. The Pensions Regulator will be monitoring the development of this and see how this impacts auto enrolment and the number of staff who may need to be auto enrolled.
Auto Enrolment Review
The Department of Work and Pensions is carrying out a review of Auto Enrolment during 2017 and The Pensions Regulator has stated that they are looking forward to working with the DWP on the future evolution of auto enrolment.