is accompanied by a list of draft key features which represent the regulator’s current view of the core components of a DC scheme most likely to result in a better income for savers at retirement. The draft key features have been developed following a series of discussions with the pensions sector during the early part of 2012 and will help inform the regulator’s future approach, on which the regulator will consult in early 2013. For more information and to download the statement and draft key features, please visit the regulator’s website An online ‘DC qualifying scheme tool’ is also available, to help employers assess whether their existing DC scheme meets the minimum criteria for an automatic enrolment scheme, as set out in legislation. The tool is accompanied by a downloadable leaflet ‘Selecting a good automatic enrolment scheme’ which sets out a number of questions for employers to consider when they are selecting a pension scheme for automatic enrolment, or assessing the quality of their existing scheme. Visit the ‘DC qualifying scheme tool’ to find out more.
The principles and features are supplementary to the legal criteria required for a scheme to be considered as qualifying for automatic enrolment.
INSURERS SPLIT ON HANDLING CONTRIBUTIONS DURING OPT-OUT
20 June 2012
Providers are split on whether employers or insurers have responsibility for holding employee contributions during opt-out periods.
Professional Pensions reports
Contributions are deducted as soon as an employee becomes eligible for auto-enrolment, at the beginning of their 30-day opt-out period. While some insurers will take this contribution immediately, others refuse to hold the money until the employee has opted in.
Legal & General pensions strategy director Adrian Boulding said his firm will provide an option to hold the money, but will discourage it.
“We do offer a choice but recommend that the employer route is the best option,” said Boulding. “In most cases employers are choosing to hold on to the first month’s contributions from new joiners so that they can get refunds back promptly to people who opt out.” Standard Life head of workplace savings Jamie Jenkins said the Scottish insurer will offer an option where employers can hold the money themselves, or send it to Standard Life. He said: “The employer can send the payments to the pension provider. This may work better for those members who remain opted in, which for most employers will be the majority.”
However, a spokesperson for Scottish Widows said the mutual does not expect employers will want to handle contributions themselves.
“Our expectation is that the employer will pass all payments to us as soon as they have been taken from pay. We will then apply these to a policy for the member,” the spokesperson said. L&G, Standard Life, Aviva and Scottish Widows all said they will invest contributions received in the opt-out period in their default funds. This means that if members opt out, the insurers must refund the original contribution value, even if the fund loses money during that period. However, some insurers are unwilling to take on this investment risk or administrative expense.
Read the full story
CIPP Policy News Journal
12/04/2013, Page 235 of 362
Made with FlippingBook - Online magazine maker