every £1 invested must be made to work as hard as possible towards improving member retirement outcomes; and until trust in the pension system is restored, hard compulsion should not be considered. The executive summary explains why these two themes are used. Pension scheme membership alone does not guarantee retirement security. For anyone other than a low earner, minimum contributions under automatic enrolment (after allowing for the prospective single tier State pension) will not provide adequate pension outcomes. Nevertheless, the only real and meaningful measure of success for the workplace pension reforms will be the outcomes experienced by those auto-enrolled. Increasing minimum contributions under automatic enrolment and/or requiring everyone to save more is not appropriate in the current economic environment. Decommissioning DB Schemes: A lot of time is devoted to past service DB schemes and companies are spending more on DB deficit contributions than on DC pension provision for current employees. If they are expected to properly engage with their DC schemes or seriously consider Defined Ambition as an alternative, then employers need more support in their endeavours to manage down existing pension liabilities that no longer play a part in the recruitment, retention or motivation of employees. ‘Pot Follows Member’: The concept of automatic transfers should be extended to all transfers. However, to protect members from fraud and from themselves, trustees should be allowed to refuse a transfer request where they have a reasonably founded concern that pensions liberation is taking place. Open Market Option: Consideration of the open market option (OMO) must be made compulsory; automatic enrolment schemes should have a process to help members at retirement; and alternatives to annuities should be explored as part of the Defined Ambition initiative. Working Longer: Delaying retirement or, at least, full retirement has to be part of the solution for achieving pensions adequacy. We therefore need to remove barriers to working longer and ensure that workers delaying their retirement remain productive by staying healthy, so that they are not just ‘retiring on the job’. The report’s key recommendations are:
The full report can be accessed through the link below.
Achieving the 21st century pensions settlement: Beyond automatic-enrolment
Automatic enrolment: Pay reference period changes
27 September 2013
Pensions Minister Steve Webb has just announced at the CIPP's annual payroll and pensions conference, a number of changes requested by the CIPP and the payroll profession. One that payroll professionals will be extremely pleased to hear about is that for automatic enrolment the tax period will be used as the pay reference period. This will come into force from 1 November 2013.
Other changes that require primary legislation changes will be expected next year.
CIPP Policy News Journal
16/04/2014, Page 389 of 519
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