Under Pensions Auto Enrolment employers will have to automatically enrol eligible workers in a qualifying pension scheme and make pension contributions for those employees. The Auto Enrolment process is being rolled out in stages and the contributions will be increased over time to broadly 8%.
The government backed pensions option is the National Employment Savings Trust (NEST) which has received some criticism. To establish the level of concern, the Department of Work and Pensions sought views and evidence on whether the annual contribution limit and transfers restriction would impact many employers and employees. The government has now published the response to consultation.
Steve Webb Minister for Pensions said:
‘With over 250,000 members already, it is clear that NEST is a success. Targeting low to moderate earners that the market has traditionally forgotten, NEST has innovated with its use of language and investment strategy and has ensured that everyone has access to quality pension provision. That is why I am not making any changes until 2017, when automatic enrolment is fully rolled-out. At this point I will lift the contribution limit so that NEST remains a force for good in the marketplace, driving up standards and best practice.’
‘The position on bulk transfers is much the same. As huge numbers of employers gear-up to start to enrol their workers, we need NEST to focus on getting these people in to pension saving. Once this is achieved and the market is established, the restrictions on bulk transfers will be lifted.’
If you would like further advice on Pensions Auto Enrolment please do get in touch.
Internet link: Press release
Posted – 06/08/2013