This consultation looks at how Government and the pensions community can work together to solve a key challenge facing the workplace pensions system: the proliferation of small pension pots. The Department for Work and Pensions (DWP) anticipate that automatic enrolment and a highly mobile jobs market will lead to around 4.7 million additional small pension pots in the future pension system. The burden of these small pots is compounded by the fact that systemic barriers, like cost and complexity, prevent people from moving and consolidating their pensions into the one place. This consultation suggests a number of ways to help people get the most out of their pension, and more easily transfer and keep track of their pension savings. The proposed approaches range from: · improving the current member-initiated framework, including encouraging members to consolidate their pension savings and reducing the cost of administering small pension pots; · automatically transferring small pension pots to one or more aggregator schemes, so that all small pension pots are stored in one place; and · automatically transferring pension savings so they follow an individual from job to job. The DWP welcome feedback and evidence from stakeholders about how these possible solutions might work in practice. They also want to hear from stakeholders about any other ways to improve transfers and reduce the number of small pension pots. Firm proposals for reform in this area will be published next year. The paper also announces the abolition of short service refunds for DC occupational schemes. These rules jeopardise pension savings for low to median earners and have no continuing role in an automatic enrolment world. Abolishing the rules will retain £70-£130 million in pension saving. The aim is to abolish these rules at the earliest legislative opportunity and the DWP expect the rule change to happen as soon as 2014, provided they are able to implement an accompanying solution for small pot transfers at the same time. 24 January 2012 The government has published a consultation which lays out how schemes should go about equalising guaranteed minimum pensions. The consultation concerns amendments to the Equality Act 2010 and the Pensions Act 2004 to reflect development in the case law of the Court of Justice of the European Union. These developments in European law mean that, where a pension scheme is equalising its benefits as between men and women, it has to assume a notional comparator where the inequality is a result of the Guaranteed Minimum Pension (GMP) provisions in the Pension Schemes Act 1993. The purpose of this consultation is to seek comments from scheme trustees and other interested parties on whether the draft Regulations achieve their intended outcome; to reflect the European law position on equal treatment of men and women as it applies in the field of occupational pensions, in so far as any differences result from the GMP provisions in the Pension Schemes Act 1993. The government are also seeking views on a possible method schemes could use to equalise for the effect of the GMP provisions. The consultation period begins on 20 January 2012 and runs until 12 April 2012. GOVERNMENT CONSULTATION ON EQUALISING PENSION BENEFITS
CIPP Policy News Journal
09/10/2012, Page 177 of 234
Made with FlippingBook - Online magazine maker