The Minister of State, Department for Work and Pensions (Steve Webb)
Later today I will be publishing a call for evidence: “Supporting automatic enrolment: A call for evidence on the impact of the annual contribution limit and the restrictions on transfers on the National Employment Savings Trust”.
The National Employment Savings Trust (NEST) was established to underpin automatic enrolment and has a key role to play in making the workplace pension reforms a success. We estimate that between two and four million people will be enrolled into NEST by the end of implementation.
This call for evidence explores the questions raised by the Work and Pensions Select Committee about the impact that two of the constraints on NEST—the annual contribution limit and the restrictions on transfers—are having on employer choice and whether they work as the policy intended.
It is critical to the success of automatic enrolment that employer choice leads to individuals getting a good deal when saving for their retirement, provision that is suitable for their savings needs, with charges that offer good value for money. We do not want the achievement of automatic enrolment to be undermined by employers—particularly smaller employers—perceiving the annual contribution limit and the transfer restrictions on NEST as complex and costly to administer, potentially leading to adverse outcomes for individuals. However, evidence currently available to the Department for Work and Pensions is not conclusive that these two constraints are acting as an unintended barrier to employers choosing to use NEST.
This call for evidence seeks views and evidence on whether the annual contribution limit and the transfer restrictions imposed on NEST continue to work as intended or whether the Government should consider alternative approaches, especially as smaller employers start to engage with the reforms.
The document will be available later today on the Department’s website at:
www.dwp.gov.uk/consultations/2012/.
I will also place a copy in the Libraries of both Houses.