Auto-enrolment, which is the result of reforms to UK pension law introduced in the 2008 Pensions Bill, requires all companies to automatically enrol employees in an approved pension scheme.
The new legislation, which is being rolled out in stages by company size, will see employers contribute an initial 1% of their employees’ pensionable earnings, rising to 3% by Oct 2018.
Employees will contribute 0.8%, rising to 4%, while an additional 0.2%, rising to 1%, will come from tax relief.
While the scheme was officially rolled out to the largest UK employers on 1 October, it will be some time before the bulk of UK print companies start to be affected.
The staging dates for companies with fewer than 350 staff start from February 2014, while the staging date for those with less than 50 staff are spread between 1 August 2015 and 1 February 2017.
However, PIPS chairman Dennis Haynes stressed that now was the time for the industry to "get ready" to avoid being caught out at the last minute.
The PIPS scheme, which is the result of a long-standing partnership between the BPIF and Unite, is provided by Standard Life and Legal & General, with independent advice from Meridan Financial and RSM Tenon.
While other low-cost, multi-employer schemes – such as the government-backed NEST scheme – are available, PIPS highlighted the benefits of its proposition.
Alan Hudson of Meridan Financial stressed that there would be no cost to employers for set up, administration or investment, with the only charge coming in the form of a 0.85% annual fee.
Adrian Boulding, Legal & General pensions strategy director and one third of the team that was commissioned to review automatic enrolment in 2010, said that by the end of the year 600,000 people will have automatically enrolled in a pension scheme backed by employer contributions and that – even allowing for a 30% opt-out rate - 7m will have enrolled by the time the roll out is completed in 2017.
"This is going to be a fantastic achievement and the politicians of all sides that joined the cross party consensus behind auto-enrolment deserve congratulations," he added.
"In many ways auto-enrolment resembles the launch of Blair’s Stakeholder Pensions 11 years ago. The focus is on the workplace and the product is very similar – usually a personal account with very low charges. But two magic ingredients have been added this time round that were missing in 2001.
"Employers will have to contribute, nearly doubling the employees’ contributions. But more important still is the guile of auto-enrolment. You are in unless you opt out."
However, Unite national officer Steve Sibbald sounded a warning bell on the ability to ‘opt out’, arguing that it left the door open for employers to encourage their staff to sign away their rights as happened with the European Working Time Directive.
"Certainly for larger employers auto-enrolment will absolutely have a beneficial effect," he said. "My concern is further down the line when we get to the smaller employers – there will be some who won’t do it and will just say: if you want to work here, sign this form and opt out."
