Pensions Act 2008
 | |
| Long title | An Act to make provision relating to pensions; and for connected purposes. |
|---|---|
| Citation | 2008 c 30 |
| Introduced by | Peter Hain |
| Territorial extent | United Kingdom |
| Dates | |
| Royal assent | 26 November 2008 |
Status: Amended | |
| History of passage through Parliament | |
| Text of statute as originally enacted | |
| Revised text of statute as amended | |
The Pensions Act 2008 (c 30) is an Act of the Parliament of the United Kingdom. The principal change brought about by the Act is that all workers will have to opt out of an occupational pension plan of their employer, rather than opt in. A second change is the creation of a National Employment Savings Trust, a public pension provider for those who do not have an occupational pensions, which will function as a low-fee pension scheme in competition with existing funds.
Key provisions
[edit]Automatic enrolment
[edit]The cornerstone of the Pensions Act 2008 is the introduction of automatic enrolment. This provision requires employers to automatically enrol eligible workers into a qualifying pension scheme.[2][3] The key aspects of automatic enrolment include:
- Workers aged between 22 and the State Pension age, earning above a certain threshold (initially set at £5,035, later increased to £10,000), must be automatically enrolled.[2][4]
- Instead of choosing to join a pension scheme, workers now have to actively decide to opt out if they do not wish to participate
- Employers must enrol eligible workers from their first day of employment, although some high-quality schemes may have a three-month deferral period
National Employment Savings Trust (NEST)
[edit]The Act provided for the creation of the National Employment Savings Trust (NEST), a public pension provider designed to offer a low-fee pension scheme. NEST serves as an alternative for workers who do not have access to an occupational pension scheme through their employer.
Employer contributions
[edit]A key feature of the Act is the requirement for employers to contribute to their workers' pension schemes. The minimum contribution rates were phased in over time, starting at 2% of qualifying earnings and increasing in subsequent years.[5]
Implementation timeline
[edit]The implementation of the Pensions Act 2008 was staged over several years:
- October 2012: Large employers began implementing automatic enrolment
- June 2015 to May 2017: Small and micro employers were brought into the scheme[5]
- September 2017: The final staging date for the rollout of automatic enrolment
Compliance and enforcement
[edit]The Pensions Regulator was given responsibility for ensuring compliance with the new regulations. The regulator has the power to issue notices and penalties to employers who fail to meet their obligations under the Act.[6]
Amendments and future developments
[edit]Since its enactment, the Pensions Act 2008 has undergone several amendments and updates. These include changes to earnings thresholds, contribution rates, and the expansion of eligibility criteria.[5]
See also
[edit]- Minimum employer contribution
- Pensions in the United Kingdom
- National Employment Savings Trust
- Pensions in the United States
- Pension Protection Act of 2006, a law allowing (but not requiring) employers to automatically enrol employees into defined contribution schemes
- State pensions Acts
- Private pensions Acts
Notes
[edit]- ^ The citation of this Act by this short title is authorised by section 151 of this Act.
- ^ a b Pensions, Department for Work and. "Explanatory Notes to Pensions Act 2008". www.legislation.gov.uk. Archived from the original on 25 September 2023. Retrieved 7 January 2025.
- ^ Pensions, Department for Work and. "Explanatory Notes to Pensions Act 2008". www.legislation.gov.uk. Archived from the original on 25 September 2023. Retrieved 7 January 2025.
- ^ "Pensions Act 2008" (PDF). Congreso de los Diputados. Retrieved 7 January 2025.
- ^ a b c "Summary: Workplace pensions and Automatic Enrolment: employers' perspectives 2022". GOV.UK. Retrieved 7 January 2025.
- ^ "Compliance and Enforcement Strategy for Employers Subject to Automatic Enrolment Duties". The Pensions Regulator. June 2016. Retrieved 7 January 2025.
References
[edit]- 'All firms must offer pensions, government agrees' (27 October 2010) BBC News
- E McGaughey, A Casebook on Labour Law (Hart 2019) ch 6(4)
External links
[edit]- Department for Work and Pensions explanatory page
- The Pensions Act 2008, as amended from the National Archives.
- The Pensions Act 2008, as originally enacted from the National Archives.
- Explanatory notes to the Pensions Act 2008.
