The impending changes to workplace pensions, which start in just over 12 months time for major employers, are possibly the biggest pensions reforms in our lifetime and will feature greatly in many company's consciousness over the next few years or so, and beyond.

For many employers in the private sector, compulsory Workplace Pensions Reforms present a significant challenge, both in terms of the direct costs of a scheme but also the indirect cost of compliance with the various duties for employers.

The reforms are being introduced gradually over 4 years from autumn 2012, with the largest employers needing to comply in 2012 and the smaller employers gradually being introduced to the reforms over the 4 year term.

Each employer is given a start date or "staging date" by the government and each employer then needs to work back from that staging date and identify and assess actions required between now and then. But don't leave it to the last minute - there is a lot to do to comply with your legal requirements and there will be bottlenecks that will cause you problems unless you plan and act soon.


Actions Required by all Employers

In terms of action required by employers, there are plenty, so to give you a flavour, here they are:

* Pensions Audit - check what you need in terms of pension scheme in relation to what you may already have in place and whether any existing scheme can be utilised in the future to fulfil your obligations.

* Business Planning - each firm needs to budget & plan for the direct pension costs, plus the time & the responsibility involved complying with the various employer duties.

* Employment provisions - do you need to involve lawyers to review employment contract terms & conditions, staff handbook etc?

* Registration with the Pensions Regulator - you need to register.

* Assessment of various categories of employee – this needs to take place, as different categories of employee merit different treatment within the rules. There is also a need to continuously assess the eligibility for each employee on an ongoing basis and change the employee's "category" according to the reform's rules.

* Information - needs to be provided to employees & records retained to confirm compliance with information provision.

* Pension implementation - you need to actually implement an appropriate pension scheme and automatically enrol the relevant employees.

* Regulatory implementation - you also need to ensure the necessary regulatory assessment & monitoring takes place.

So, as you can probably gather, compliance can be significant and costly, and together with the minimum employer contribution (which will eventually be 3% of the employee's relevant pay), this can all lead to headaches for you.