About 9,000 workers who are subject to labour laws in both the UK and another European country are to be exempted from the auto-enrolment process.
The Department for Work and Pensions estimated this would cost this group of workers a total of £10m a year in lost employer contributions and tax relief and save these employers approximately £7.4m annually.
In its response to a consultation on the issue the department said 16 out 19 respondents backed the exemption as a welcome deregulatory measure.
Five responses noted the exemption could disadvantage firms that selected a personal pension scheme to meet their obligations as it only covered occupational pensions and four advocated extending it to cover workers from outside of the European Economic Area.
DWP dismissed calls to apply the exemption to anyone an employer "reasonably believes" to be dual status as there was little difference between this and the apparently higher standard set in the legislation.
Four respondents called for improved guidance to help identify workers who were ‘ordinarily resident in the UK' and the department said The Pensions Regulator would consider this when updating its guidance.
The DWP said it had made some minor technical changes to the draft regulation which were laid before parliament yesterday to come into force on 2 July, but had not amended the main provisions.
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