The Department for Work and Pensions (DWP) has announced that there will be an independent review of the automatic enrolment element of the 2012 pension reforms.

The review will further the Pensions Commission’s work in increasing private pension saving through the introduction of mandatory auto-enrolment into workplace pensions.

Building on work in the Turner Review, the Government announced that this time around issues such as the credit crunch, a greater understand of likely costs and the proposed charging structure for the National Employment Savings Trust (NEST) scheme, the approach and profile for introducing new employer duties, the review of the state pension age and other changes such as increased longevity will be addressed.

The review will look at whether the proposed scope for auto-enrolment will actually work, balancing between costs and benefits to individuals and employers, or whether a different scope is necessary.

The earnings threshold, a minimal level for contributions, the age group and size of firm to which auto-enrolment should apply, the date on which employees should be enrolled and the availability and capacity of providers other than NEST to serve the auto-enrolled population will also be considered.

The DWP said the review “should provide a critical analysis of the rationale underpinning the current approach to the programme, identifying whether alternative approaches could improve outcomes or value for money. It will also inform wider discussions on affordability and value for money in the context of the next Spending Review.”

The review is to present its analysis, occlusions and recommendations by 30 September 2010.

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