The Chartered Institute of Payroll Professionals ……………………………………………………………Policy News Journal
We recommend DWP use their response to this report to make a clear and comprehensive statement about an employer’s potential liability. DWP should also confirm where liability will fall if a scheme performs badly or fails. This would provide reassurance to small and micro-employers choosing a scheme. For some employees, notably higher earners, saving for retirement in a Lifetime ISA may complement pension saving. Those with a limited disposable income, however, will need to weigh competing priorities and many will be faced with the option to either save in a LISA or remain in their workplace pension. Whatever the attractions of the LISA, it must not be presented as a direct alternative to AE. Savings under AE carry an employer contribution, which will not be available in the LISA. Opting out of AE to save for retirement in a LISA will leave people worse off. Government messages on this issue have been mixed. While the DWP has been very clear that the LISA is not a pension product, the Treasury has proffered an alternative view. We recommend the Government develop a communications campaign that highlights the differences between the LISA and workplace pensions. It should make it clear that the LISA is not a pension and that, for employees who have been automatically enrolled, any decision to opt-out is likely to result in a worse outcome for their retirement. The Government should also conduct urgent research on any effect of the LISA on pension saving through AE. The findings of this research should be reported in time for the 2016 Autumn Statement. We will review that evidence before the introduction of the LISA. Any further changes to AE should be implemented after the critical phase, due to complete in 2018, when small and micro employers must comply with their duties. The 2017 review will be an ideal opportunity to consider the future of AE and we welcome the Minister’s invitation to engage with it. (Paragraph 62) removing the lower qualifying earnings band for contributions and lowering the earnings trigger threshold in order to bring more low paid people, including many more women, into AE; mechanisms for automatically enrolling self-employed workers, including how the income tax self-assessment system might be used; approaches to increasing contributions beyond the statutory minimum of 8% of qualifying earnings, including mandatory increases in employee and employer contribution rates and means of encouraging greater voluntary contributions; steps necessary to create a single, comprehensive pensions dashboard by 2019 and the degree of Government intervention necessary to deliver on its pledge. We recommend that as part of its 2017 review of AE, the Government considers:
Read the full report - Eleventh Report of Session 2015–16 .
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Updated automatic enrolment detailed guidance 31 May 2016
The Pension Regulator’s detailed guidance has recently been updated to include the changes which came into force on 6 April 2016.
Changes include the new thresholds, changes relating to worker exceptions (including the new employer option to not automatically enrol a director) - and changes to the timings for completing the re-declaration of compliance when carrying out cyclical re-enrolment.
Follow this link to download all of the guidance .
Do you know?
Group personal pension schemes open to all employers can now apply to appear on TPR AE list More employers are approaching their re-enrolment date. What does this involve?
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The Chartered Institute of Payroll Professionals
Policy News Journal
cipp.org.uk
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