13 May 2008
Pension consultants have warned that measures aimed at
preventing employers from abusing the personal accounts system may
in fact encourage good employers to close down existing
schemes.
Many existing pension schemes do not count fluctuating elements,
such as bonuses and overtime as pensionable pay, but under
Government proposals all earnings between a lower and higher limit
(between £5,000 and £33,500 per annum at outset) will
count towards the 8% contribution for personal accounts. Employers
will therefore have to routinely check whether the amount
contributed matches the personal account contribution.
