Pensions: Automatic enrolment – background

Under the workplace pension reforms, employers will be required to automatically enrol workers into a qualifying pension scheme. Unless the worker opt outs, minimum contributions must be paid. When the reforms are fully introduced, the minimum contribution will be 8% of a band of “qualifying earnings”: 3% from the employer; 4% from the worker and 1% in tax relief. The reforms have their origin in the work of the Pensions Commission, chaired by Lord Turner of Ecchinswell and were originally legislated for by the Labour Government in the Pensions Act 2008. This notes looks at the background to the scheme. A separate note – SN 4847 Pensions: automatic enrolment – 2010 onwards – takes the story forward.