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A report from the National Audit Office (NAO) has revealed that the Government has drafted contingency plans for placing a last-resort ‘emergency pause’ on the pensions auto-enrolment scheme, as fears arise over the disorder that the legislation could bring for smaller employers.
Government ministers will make use of the emergency pause option if auto-enrolment proves to be too difficult for small businesses to implement, or if the programme results in increases in demand with which it is unable to cope.
The option of an auto-enrolment pause has been introduced as a result of concerns that employers may struggle to deal with both the forthcoming changes to the National Minimum Wage and the new pensions measures.
The Government harbours additional concerns over pension providers’ abilities to cope with the volume of employees that must be enrolled under the new scheme.
The report stated: ‘The Department for Work and Pensions is now rolling out automatic enrolment to small employers, who pose new challenges for the programme.
‘The profile of employers affected by automatic enrolment is now changing dramatically.’
Experts have reported that there is a ‘high risk’ of respite having to be offered by 2018.