However, there will be no get out for those in local government as the legislation applies to all employers. With the first deadline only months away, it is time for the sector to unpick false assumptions, clarify the requirements, consider the cost and communication challenges and take action.
A common mistake is to rely on the fact that a local government employer is operating within the spirit of the rules. But this does not stand up to scrutiny as the regulations are very prescriptive, going beyond the scope of existing processes. For example, employees who turn 22 or who start to earn more than £8,105 a year must be auto-enrolled at the time their salary passes this mark.
It is, though, worth knowing that there is the option to make use of the transitional period. Local authorities providing a good quality defined benefit scheme (like the LGPS) to all employees can choose not to auto-enrol current employees until 2017. I have found few local government employers know this is possible. Since almost all auto-enrolment information is private sector focused, this point is hidden in the small print and easily missed.
Nevertheless, those planning to bide their time should not assume that this removes all obligations for 2013. New joiners must be auto-enrolled from next year and those who opt out have to be re-enrolled every three years. As there is currently no formal re-enrolment policy within local government, even employers who actively encourage scheme membership will not be compliant.
Employee communication also needs to be considered in light of wider pension reforms. If auto-enrolment is likely to result in many new pension scheme members - therefore proving costly - it will be worthwhile investing in communications to encourage employee engagement around the benefits of the reforms. On the other hand, if it feels more like a compliance exercise - for those with already high levels of scheme membership - communications might be best kept to minimum.
My view is that many local government workers who are not in the LGPS have decided that it is not for them. Auto-enrolment might persuade some to change their minds while others will forget to opt-out. If a low-cost option linked to auto-enrolment is introduced as part of the 2014 reforms public sector scheme membership may be enhanced. But the impact of the reforms will be significantly less than in the private sector. In fact, with less than 1m public sector workers currently not in a pension scheme, I estimate auto enrolment will result in as few as 250,000 new pension scheme members in the sector.
Regardless of the fact that auto enrolment was not designed with the public sector in mind the legislation stands and, with just a few months before many local authorities need to be ready, pensions, HR, payroll, IT and finance specialists in the sector will have to roll up their sleeves. Those that have not yet taken action will find it challenging to comply.