24 June 2008
The Department for Work and Pensions (DWP) has announced that
encouraging or forcing workers not to save in a workplace pension
will become unlawful under proposed changes to the Pensions
Bill.
Minister for Pensions Reform Mike O'Brien said the DWP intends
to amend the current Pensions Bill during the Lords stages to
prohibit employers from offering "inducements" - such as higher
salaries or one-off bonuses - which encourage workers to opt
out.
The amendment will also cover circumstances where employers
simply try to force their workers to opt out. This will leave
individuals free to decide if they want to be a member of a
workplace pension scheme. The ban would come into effect with the
introduction of auto-enrolment from 2012.
The Pensions Regulator will be responsible for enforcement of
the prohibition on inducements.
Where employers flout the rules against inducements, the
Pensions Regulator would have the power to require employers to put
the worker back in the position they would have been in had they
not been induced out of the scheme, by paying any arrears of
contributions due, and could ultimately impose penalties where
employers fail to comply.
