Pensions Charges

Steve Webb Excerpts

Monday 1st July 2013 Written Statements

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

I am pleased to announce that later today we intend to lay draft regulations to prevent the use of consultancy charges in automatic enrolment schemes. This will apply to both personal and occupational pension schemes providing money purchase benefits.

Under the draft regulations, a scheme with a provision allowing amounts to be deducted from a jobholder’s pension pot or contributions will not be an automatic enrolment scheme if that amount is to be paid to a third party under an agreement between the employer and the third party.

These draft regulations will not affect pension schemes where there was a legally enforceable agreement in place between an employer and a third party before 10 May 2013.

In my statement on 10 May 2013, I announced the Government’s intention to publish a consultation in the autumn following the publication of the Office of Fair Trading’s market study on charges in defined contribution workplace pensions. As part of this, I intend to consult on extending the prohibition on consultancy charges to all qualifying schemes. Regulations could be introduced using the power in clause 35 of the Pensions Bill, subject to the successful passage of the Bill currently before the House.