06 November 2008
Changes to the pensions bill, aimed at trimming costs for
employers and introducing flexibility into the way company
contributions are made to the new personal accounts, are being
planned by the government.
Rosie Winterton, the new pensions minister, is today expected to
set out the broad outlines of an agreement enabling employers who
contribute more than the statutory minimum to personal accounts to
keep on doing do, while allowing room for manoeuvre in the
administration of personal accounts for those that do not.
The pensions bill will create a requirement for employers
automatically to enrol all workers in a personal pension scheme and
contribute 3 per cent of "qualifying earnings" on their behalf
unless the employee opts out.
The government has defined "qualifying earnings as basic pay,
overtime, bonus and commission within a given year", and of between
£5,035 and £33,540 annually.
Ms Winterton will announce a "self-certification" procedure for
employers who are confident that their own existing scheme rules
will make contributions that are at least equal to those that would
be required under the pensions bill. That will make it unnecessary
for companies to make expensive changes to their system.
