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Gov’t plans auto-enrolment simplification ahead of SME start date

by Brian Cantwell on Jan 30, 2013 at 14:00

Gov’t plans auto-enrolment simplification ahead of SME start date

The government is planning to simplify the auto-enrolment regime prior to small and medium sized businesses' introduction to the reforms.

Auto-enrolment launched for companies with over 120,000 employees in October 2012. Firms with a 100 or less employees will have to comply with the reforms from May 2014 onwards.

Speaking at event organised by the National Employment Savings Trusts (Nest), pensions minister Steve Webb said the government would use the early stages of auto-enrolment to assess what systematic barriers and difficulties existed and work to remove these for smaller firms.

‘What we will do, is practice it on the big guys, learn our lessons, and then do a round of simplification so that by the time we get it to small and medium sized firms those irritating things that don’t really need to be there and the things that don’t make sense we can iron out,’ he said.

Webb (pictured) also said the government’s proposed reforms of the small pension pot regime, dubbed ‘pot follows member’ could be a success, provided companies selected good quality schemes to auto-enrol employees into.

The ‘pot follows member’ plan has attracted criticism that it could lead to employees being moved into worse schemes than they had been in before.

‘Quality is clearly the second issue we need to address: we need to make sure that not only is enough money coming in but they are good enough schemes,’ he said.

'If we make sure that people are enrolling in good schemes in the first case then we don't have to worry about pot follows member'

7 comments so far. Why not have your say?

Allan Maxwell

Jan 30, 2013 at 14:36

It seems to me that Mr Webb is still not looking closely enough at the need for good communication with all of those individuals being auto-enrolled.

The Auto-enrolment story must be communicated positively. If the Government want people to provide for their own retirement we need more "carrot" encouraging individuals to join. They also need to make it easier for employers to cover the cost of implementing a qualifying scheme.

I recently heard an appalling story about a new scheme with a 15% take up rate. Clearly a very ineffective message was delivered to those employees.

Without making a virtue out of retirement saving now compulsion cannot be very far away.

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Keith Cobby

Jan 30, 2013 at 15:48

Does the employer or the employee decide the pension provider?

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Jan 30, 2013 at 16:25

The employer.

Mr Webb needs to get a move on if he's planning any changes. We're being told by NEST, The Peoples Pension and other providers that you need at least a 6month lead in time to get plans set up.

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Richard Hardy

Jan 30, 2013 at 16:32

I and many IFA's remember the last time the Government used the word simplification!

Ended up being anything but!

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Richard Hardy

Jan 30, 2013 at 16:32

Replace the word simplification with shambles!

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David Prior

Jan 30, 2013 at 16:46

@ Allan Maxwell - to be fair, at some companies, a 15% take up rate isn't bad at all!!

I remember doing a presentation at a firm some years ago - all the staff were young and on minimum wage at a pottery firm in Stoke. They sat there all day with headphones on, listening to their own music whilst painting pottery figures by hand.

They were all told that we were there to answer any questions over lunch and the company would be matching their contributions

Not a single one wanted to know the first thing about it - quell surprise!

You can lead the horse to water........

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Philip Wise

Jan 30, 2013 at 20:05

I would imagine that Mr Webb will be one of those "irritating things" that will get ironed out at the next election.

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