Reforms introducing auto-enrolment, employer duties and personal accounts will be staged in over a three year period from 2012, the department for work and pensions (DWP) says.
It says the second batch of auto-enrolment regulations - published today - struck the right balance between getting people into saving as quickly as possible and minimising the operational risk associated with the reforms.
It adds the three year period would also include a number of one-month breaks in which no employers are staged in to allow any backlogs or unplanned events to be addressed.
The DWP said it proposed to bring employers into the duties by size - broadly starting with the largest employers and ending with the smallest.
It says it would split employers into 25 - 30 groups according to their size - requiring each group to start automatic enrolment on an assigned date.
It adds it currently anticipates large and medium sized employers would be staged in over the first year with small and micro employers being brought in over the following eighteen months to two years.
However it says it would move to bring a small group of randomly selected employers with fewer than 50 workers into the duties earlier to make sure it could understand the responses of this group.
Contribution levels will also be staged - with employers using defined contribution schemes being required to pay contributions of 1% until staging is complete, 2% for a further year and 3% thereafter.
And it said, as employers with defined benefit schemes could not phase in contributions, they would be allowed to delay auto-enrolment until after the staging period had ended.
The DWP said it had rejected a "big bang" approach of bringing all employers into the duties on day one as it was not operationally viable - and would lead to unmanageable peaks of activity for the Pensions Regulator, PADA and pension providers.
However it proposed that employers would be able to bring forward their automatic enrolment date to a specified date after October 2012 should they inform the regulator. Firms will not be allowed to start auto-enrolling before October 2012.
The consultation will also seek views on matters including scheme self certification, qualification criteria for pension schemes and requirements to provide employees with information on auto enrolment.
It will also make additional proposals for the compliance and enforcement regime of auto enrolment.
Minister for pensions and the ageing society Angela Eagle said: "These landmark reforms, on a scale unprecedented anywhere in the world, will ensure millions of workers on low and moderate incomes will be able to save for retirement in a workplace pension for the first time.
"Our reforms mean people will receive a mandatory employer contribution and tax relief from the state. We encourage all stakeholders to continue to play their part in this important consultation as we deliver this ambitious programme."
The responses to the consultation on the first batch of regulations were also published today.
This is the final consultation on regulations that will be needed to deliver automatic enrolment.
This consultation will run until 5 November and is available at http://www.dwp.gov.uk/consultations
The government is also publishing a second consultation, on draft guidance on the use of group self invested personal pensions for auto-enrolment and the use of default options in workplace personal pensions used for auto-enrolment.
Partner Insight: Cathi Harrison, director of para-sols and Apricity and Clare Farrell managing director at Northfield Wealth met in London recently to discuss how to stay on top of regulatory risk.
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