Everything you need to know from today's DWP auto-enrolment review...
- The earnings threshold at which an individual is automatically enrolled into a workplace pension will be increased and aligned with the income tax personal allowance. This is currently set at £7,475 for 2011.
- Thresholds at which pension contributions become payable are aligned with the National Insurance primary threshold. Workers can opt in to saving and receive an employer contribution if they earn between these two thresholds.
- Auto-enrolment will apply to everyone in employment aged 22 to state pension age, which will reach 66 by 2020.
- The automatic enrolment duties should apply to all employers regardless of size, as now.
- Communications to micro-employers from the Pensions Regulator should flag as strongly as possible the design of NEST specifically takes account of their needs, and should support easy access.
- DWP should look to provide maximum possible comfort to employers that they will not be held liable for their scheme choice, particularly if they opt for NEST or a stakeholder scheme to fulfil their new duties.
- There should be a simpler system by which employers can certify their defined contribution pension scheme meets the required contribution levels.
- There should be an optional ‘waiting period' of up to three months before an employee needs to be automatically enrolled into a workplace pension. Workers can, however, opt in during the waiting period.
- The largest employers, who are scheduled to be brought into the reforms in October and November 2012, should be allowed to automatically enrol as early as July 2012 if they wish.
- Employers should be given flexibility around the date they re-enrol employees who have previously opted out by allowing a six month window for this activity to take place.
- NEST should go ahead as planned to support successful implementation of automatic enrolment.
- Legislation should make it clear that NEST's ‘contribution cap' will be removed in 2017.
- Government and regulators should review as a matter of some urgency how to ensure it is more straightforward for people to move their pension pot with them as they move employer. This will ensure by time of the 2017 review, the more general issue of pension transfers has been addressed and NEST is able to receive transers in and pay transfers out.
- Government should review as a matter of some urgency the scope for regulatory arbitrage between the trust and contract-based regulatory environments.
- Government should continue with work to review whether the existing regulatory regime for the provision of DC workplace pensions remains appropriate in the post automatic-enrolment world.
- Government should ensure there are effective communications to individuals, employers (and especially smaller employers) and the pension industry in the lead-up to and during the implementation of the reforms.
All-day event on 24 April
Consequences could be more severe than in stress tests
AFH has six segregated mandate funds
Variable operating expenses