Business leaders joined the pensions industry in rounding on the Government last night after it halved a consultation period on the introduction of universal workplace retirement schemes from three months to six weeks.

The CBI, the employers’ organisation, and the Association of British Insurers (ABI), which speaks for pension providers, said that the revised timetable for talks on the schemes — due to begin at the end of this month — was unacceptably short.

They said that it would leave companies unsure about whether their pension arrangements would conform to new guidelines and could result in forthcoming legislation being botched.

Maggie Craig, director of life and savings at the ABI, said: “The Government must not ignore the pensions industry and employers, who have already highlighted key pitfalls in the legislation as currently drafted.”

The Department for Work and Pensions (DWP) is planning to make it compulsory for companies to provide pensions for all staff, phased in from the summer of 2012.

A new Pensions Act came into effect last year, under which employees will be enrolled in an occupational scheme automatically or given a personal account, administered by the private sector. Companies will be expected to contribute a minimum of 3 per cent of a worker’s salary, with staff putting in at least 4 per cent of their wages.

The timing of the consultation is important because the DWP, which has already consulted once on the issue, is preparing to table further, supporting legislation before 2012. This will stipulate how companies can show that their schemes comply with the new requirements.

But the department wrote to insurers and businesses last month to say that its second consultation period would be halved, partly to cut costs.

Neil Carberry, head of pensions policy at the CBI, said: “We have told the DWP that the new consultation period is unacceptably short. These regulations will govern how those employers that have a scheme will establish that it meets the standards.

“It is worrying, very worrying, to us that we are rushing ahead. It is essential to get the ground rules right. If we get it wrong, we will simply have to revisit the legislation later,” he added. “I do not understand why they are moving so quickly.”

The ABI, along with several of its members, met representatives from the DWP earlier this week to discuss the issue. According to one person who attended the meeting, insurers made it clear to the DWP that they were unhappy with the timetable.

Insurers are worried that if employers are unsure about what kind of pension arrangements they need to provide, they will simply default to personal accounts. These will ensure only that companies and employees contribute the bare minimum to a scheme that was originally designed to help foster a savings culture in the UK.

Mr Carberry said that it remained unclear how to treat one-off payments, such as bonuses, for the purposes of pension contributions.

The DWP defended its position. It said that many of the mechanisms needed to provide workplace pensions, through the Pensions Regulator and the Personal Accounts Delivery Authority, were in place and that cutting the consultation period would reduce costs.

A DWP spokesman said that it understood industry concerns and was holding regular discussions with both employers and pension providers.

New face of pensions

• All employers will be forced to offer personal accounts or something better

• Employees will be automatically enrolled into a scheme unless they opt out and continue to opt out every three years

• Employers will chip in 3 per cent of pay, employees 4 per cent, the taxman 1 per cent

• Start date is October 2012, but there will be a phasing-in period

• Six to nine million employees will save for retirement for the first time or save more, the Government claims

• The new system will generate £10 billion a year by 2015

• Two thirds of private sector employees have no access to workplace pensions

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