16 August 2010
The government's recently announced consultation period on the
auto-enrolment rules (see TPAS news item dated 7th of
July 2010) finished on the 13th of August. Some of the
organisations that participated in this have made public their
comments to the government team.
Maggie Craig, Acting Director General at the Association of
British Insurers (ABI), commented: "The ABI fully supports
automatic enrolment into workplace pensions, which needs to be
implemented without delay... To make sure only those who can afford
to save are included, only people earning £10,000 and over
should be automatically enrolled. But those earning less should be
allowed to opt-in. The Government needs to make it as easy as
possible for employers who already contribute generously to good
pension savings for their employees to continue to do so. This is
why contributions should be based on basic earnings from £1 -
not a complex formula."
The Head of Research, Mr Jonathan Lipkin, at the Investment
Management Association (IMA) said: "The IMA continues to
support the automatic enrolment reforms and encourages the
Government to avoid any further delays to implementation. We
believe there is currently no alternative to NEST that can deliver
the desired depth of coverage for the target market at a
comparatively low cost. ". However he also added that
"NEST is not a national alternative to private sector savings
products. The rationale for its existence is strongly linked
to problems of under-saving among specific groups, such as median
to low income workers. We urge the Government therefore to
retain current safeguards, notably an annual contribution limit and
a restriction on transfers."
"Which?" Magazine's Chief Executive, Peter Vicary-Smith, said:
"A trusted pension scheme that puts consumers first is the
jewel in the crown of the 2012 reforms. Increasing the involvement
of pension providers other than NEST would lead to higher charges
and lower levels of trust, undermining efforts to encourage more
people to save for a pension. The Government must continue to
support NEST in its current form." They also detailed that a
recent Which? Survey had revealed that "a non-profit making
independent body is trusted by 5 times as many respondents as a
financial service company to manage a consumer's pension savings in
their best interest."
