Pensions: Nested interests

The incoming pension reforms Employers will have to auto-enrol all new employees into a pension scheme. This requirement will be introduced in October 2012 for the largest firms, then gradually rolled out to smaller employers until every workplace uses auto-enrolment by 2017. Employers who do not have their own pension scheme in which to auto-enrol employees must use the state-sponsored National Employment Savings Trust (Nest). Employers will have to contribute a minimum of 3 per cent of earnings for every staff member who remains opted in. This 3 per cent requirement will also be phased in, with the initial requirement being 1 per cent, rising to 3 per cent by 2017. Enrolled employees must contribute 4 per cent, while another 1 per cent is made up of tax relief. Auto-enrolled employees will have 90 days in which to opt out of the plan if they want to. If they do so they will have their contributions refunded.