We remain strongly minded to cap pension scheme charges in the default funds used for automatic enrolment. However, we have consistently encouraged firms to start getting ready for automatic enrolment twelve months ahead of the time the new employer duties apply to them. Therefore, to give those employers at least twelve months notice of the rules that will apply to them; I can confirm that any cap on charges will not be introduced before April 2015.” Mandating the Scheme Contracted-Out Number (SCON) We are working closely with colleagues for HMRC on the introduction of the Single Tier Pension in April 2016 which will bring about the end of Contracting-Out arrangements. As a result employers have an obligation to inform HMRC of “which employee belongs to which contracted-out scheme”, so that HMRC can close down all open periods of contracting-out on the individual National Insurance records. To facilitate this, from 6 April 2014 employers will be legally required to show the SCON, in addition to the Employer's Contracting-out Number (ECON), on their submissions via the real time information service when submitting contracted-out National Insurance Contributions for employees who have been in a contracted-out scheme during the tax year. Pension Scheme Administrators will play a key role in getting Employers ready by helping employers identify the correct SCON for the pension scheme membership in time to submit that SCON as part of the April 2014 onwards RTI monthly submissions to HMRC. HMRC have asked, if you are Pension Scheme Administrator to assist with this by treating SCON identification requests from employers with pension scheme members in your pension scheme with urgency. This will allow HMRC to have accurate records and prevent further significant contact to employers and Pension Scheme Administrators from HMRC in the lead up to 2016 and afterwards following our scheme membership closure activities. ‘
The changing shape of the DC auto-enrolment market 2014 to 2020
3 February 2014
Following on from their previous report Caveat Venditor, the Pensions Institute recently published a report that looks to consider the issue of value for money provided by the pensions industry.
The Pensions Institute report looks to assesses value for money in defined contribution default funds.
The report states that the most important feature of automatic enrolment schemes is the default fund, which is the multi-asset investment strategy designed for the majority of members who do not wish to make investment decisions. Total contributions, member charges, together with the fund’s full costs, the asset allocation, and the glide path (the changing asset allocation over the period of membership) are key determinants of the level of the pension income in retirement that is secured by the fund at the decumulation stage, which, at present, usually involves the purchase of a lifetime annuity. In this new report the Pensions Institute asks whether the cost of membership offers value for money to the ‘average’ member, by which they mean the 90-97% of employees who will be automatically enrolled into the default fund. Never before has it been more important for the pension industry to focus on VfM (Value for Money) as thousands of employers struggle to comply with their legal, and no longer optional, workplace pension obligations.
CIPP Policy News Journal
16/04/2014, Page 443 of 519
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