Automatic Enrolment

Steve Webb Excerpts

Wednesday 27th October 2010 Written Statements

[The Minister of State, Department for Work and Pensions (Steve Webb)]

Today, I am pleased to be able to publish the report of the independent review into making automatic enrolment work. The recommendations of the review team are a sensible and balanced package of proposals. In particular, the changes in scope and the deregulatory measures proposed will ensure the introduction of automatic enrolment is stable and proportionate. Therefore, I am pleased to announce that the Government will now proceed with implementation of the reforms on this basis.

The main recommendations are:

The earning threshold for automatic enrolment should be aligned with the personal allowance for income tax and the threshold from which pension contributions become payable should be aligned with the national insurance primary threshold. Workers may opt in to saving and receive an employer contribution if they earn between these two thresholds.

Automatic enrolment should apply to all employers regardless of size, as previously proposed.

There should be an optional “waiting period” of up to three months before a worker needs to be automatically enrolled. Workers may opt in during the waiting period.

There should be a simple system for employers to certify their money purchase pension scheme meets the required contribution levels.

NEST is necessary to support successful implementation of automatic enrolment.

A copy of the review team’s report will be available on the Department’s website at: www.dwp.gov.uk/policy/pensions-reform/latest-news, later today. Copies will also be available in the Vote Office and the Printed Paper Office from 10.30 am today.

I am grateful to Mr Paul Johnson, Frontier Economics, who led the review team, and to Mr David Yeandle OBE, Engineering Employers’ Federation, and Mr Adrian Boulding, Legal and General Group plc, who came together to make this review a success.