We’ve looked at some of the ways that contractual enrolment into pension saving is different from auto-enrolment (see Helen Powell’s post, Enrolling into pension saving: do you know your AE from your CE?) As the regime rolls into action, we are starting to come across areas where the interaction of contractual enrolment with information requirements under the auto-enrolment legislation can create practical problems for employers, and potentially end up baffling members.
Archive for the ‘Auto-enrolment’ Category
“You like to-may-to, I like to-mah-to”; you say auto-enrolment, I say contractual enrolment. Unfortunately, we can’t call the whole thing off. The pensions auto-enrolment regime is logistically quite complex. Many employers are finding it easier, for a variety of reasons, to arrange things so that their workers are already members of a suitable pension arrangement when they reach their automatic enrolment date. This may well make good practical sense, but you need to be aware that it is not auto-enrolment. This is contractual enrolment, and understanding the difference does make a difference. (more…)
G’day. Or should that be G-Day? We’ve had A-Day – heralding “pensions simplification” (a false dawn if ever there was one) on 6 April 2006 – and now G(ender)-Day is upon us: 21 December 2012. From that day, regulations borne out of the Test-Achats case will make it illegal for insurers to base the price of pension annuities on gender, by removing the Equality Act exemption that has allowed insurers to calculate premiums and benefits on a gender-specific basis. (more…)
Last week the Government gave the first indication of the numbers it is likely to use for the earnings trigger and qualifying earnings band for auto-enrolment for 2013/14. These numbers are going to be reviewed annually, so it’s no great surprise that they will shift from 6 April 2013. What is striking, though, is that the change will fall right in the peak period of employer staging dates for auto-enrolment across the UK. (more…)
Fixed protection for an individual’s lifetime allowance for tax-favoured pension benefits is a valuable thing. If you registered for fixed protection before 6 April 2012 you can keep a lifetime allowance of £1.8 million or, if greater, the standard lifetime allowance. But you lose fixed protection if you go into a new pension arrangement. You might have thought that telling your employer about your special tax status, and asking them not to put you into a pension scheme would be enough to make sure you kept your fixed protection. However I am beginning to see cases where employees are being accidentally enrolled despite asking not to be. Auto-enrolment will only add to the problem.