The challenge of implementing these reforms is unprecedented with over a million employers and over 10 million people affected.
In order to deliver the workplace pension reforms successfully, we are intending to stage in the new employer duties over a four-year period, starting with large employers, medium and then small.
Inevitably, staging of employers by size, including the temporary and agency sector, can affect the ability of all employers to compete with each other in the short term as some employers will face the cost of administering the reforms and contributing to their employees' pensions sooner than employers staged later.
We considered a number of approaches to staging, including segmenting employers by random selection, by industry type or by geographical region. We believe that staging by size offers the best balance of maximising deliverability while minimising employer burdens and competition impacts.
We believe that any impacts on competition will be short-term and outweighed by the overall positive benefits of our approach.
To further minimise competition issues we are also ensuring that employers will be required to contribute 1 per cent. of qualifying earnings throughout the staging period, before all employers move, at the same time, to 2 per cent. contributions, then 3 per cent.