Reinvigorating Workplace Pensions
Reinvigorating Workplace Pensions

Author: Great Britain: Department for Work and Pensions

Publisher: The Stationery Office

Published: 2012-11-22

Total Pages: 64

ISBN-13: 9780101847827

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The UK's pensions system is need of reform for two primary reasons. Firstly, the UK has an aging population and secondly, working age people are not saving enough to meet their expectations of income on retirement. The Government has already begun to set in train a series of reforms. In particular it has brought forward plans to increase State Pension age; set out proposals to create a single-tier State Pension to provide a firm foundation for saving for retirement; and introduced automatic enrolment into workplace pensions. We do, though, also need to ensure that those people saving privately for their retirement are doing so in high quality schemes. This strategy sets out the key issues which need to be tackled. The reinvigoration objectives include: increase the amount people are saving in pensions; increase the amount people receive for their savings; enable industry innovation to develop products which will give more certainly about pensions; increase transparency; and ensure the sustainability and stability of the UK pension system.

Department for Work and Pensions: Public Consultation: Reshaping Workplace Pensions for Future Generations - Cm. 8710
Department for Work and Pensions: Public Consultation: Reshaping Workplace Pensions for Future Generations - Cm. 8710

Author: Great Britain: Department for Work and Pensions

Publisher: The Stationery Office

Published: 2013-11-07

Total Pages: 74

ISBN-13: 9780101871020

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In Reinvigorating workplace pensions1 published last November, the Government set out to explore whether there was scope for a new category of defined ambition (DA) pensions that would complement the defined benefit (DB) and defined contribution (DC) structures that currently dominate the market. Automatic enrolment and the single-tier State Pension will provide a firm foundation for saving for retirement. But if the current forms of DC pension saving become the default alternative to traditional DB, the pension income of future generations from workplace pensions will be more uncertain than for past generations. Over the last 12 months the DA project - a joint project between DWP and the pensions industry - has been exploring options in a middle ground. The Government proposes that the regulation of workplace pension schemes should not focus on the detail of benefit design but on what is important to the member: ensuring that any promise or guarantee, whether from the sponsoring employer or scheme, provider is delivered. This Government proposes to make it easier for employers to sponsor new pension schemes where benefits accrue on a specified basis (e.g. related to salary); and also to allow additional flexibilities for future accruals only within existing DB schemes, including the possibility of allowing a statutory override to facilitate these changes. The new flexibility will remove constraints from the existing legislative framework while still giving employees the certainty of a pension scheme where the benefits are defined (such as in relation to their salary) with the security of the promise being sponsored by their employer

The Single-tier Pension
The Single-tier Pension

Author: Great Britain: Department for Work and Pensions

Publisher: The Stationery Office

Published: 2013-01-14

Total Pages: 110

ISBN-13: 9780101852821

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This paper outlines the Government's detailed proposition for state pension reform. It follows a consultation on the proposals set out in "A state pension of the 21st century" (2011, Cm. 8053, ISBN 9780101805322). There was consensus that the state pension system needed to be simplified and the aim is to merge the state second pension with the basic state pension, to create one flat-rate payment. The new flat-rate state pension will start in April 2017 at the earliest. The weekly payment will be £144, plus inflation rises between now and 2017. Chapters in this paper cover: the context for reform; the single-tier pension; managing the end of contracting-out; the transition to the single-tier pension; sustainability and assumptions; longer-term sustainability - state pension age. Annexes provide: a brief history of the state pension; faster flat rating - assessment against principles for reform; features of the single-tier pension and specific transitional arrangements; an example pension statement; proposed timetable for implementing the increase in state pension age to 67.

Automatic enrolment in workplace pensions and the National Employment Savings Trust
Automatic enrolment in workplace pensions and the National Employment Savings Trust

Author: Great Britain: Parliament: House of Commons: Work and Pensions Committee

Publisher: The Stationery Office

Published: 2012-03-15

Total Pages: 238

ISBN-13: 9780215042972

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The Government established NEST as a low-cost pension scheme to help deliver the auto-enrolment programme and to address a market failure in the pensions industry which meant that many employers and employees were unable to access low-cost, good quality pension provision. However, the Committee believes that certain restrictions placed on NEST will create complexity for employers and will disadvantage some employees. The Committee's report recommends that, if state aid rules allow, the Government should remove the following restrictions: the cap on the annual contributions an individual can make to a NEST scheme; and the ban on individuals transferring existing pension pots into NEST. The Committee further urges the Government to proceed with its plans for State Pension reform, introducing a flat-rate State Pension and reducing the level of means-testing without delay. The report also highlights the difficulties and complexity employers and employees currently face in comparing the fees and charges applied by pension providers and recommends that, from 2013 onwards, if some auto-enrolment schemes still have hidden charges, or charges that represent poor value for money, the Government should use its powers to intervene. Auto-enrolment will impose new costs and may be particularly challenging for small employers however the Committee considers that the Government has taken appropriate steps to minimise the impact on businesses through its gradual and flexible approach ("staging and phasing") to implementation. Exempting small employers would create significant complexity, as well as excluding many employees from the benefits of workplace pension saving

Automatic Transfers
Automatic Transfers

Author: Great Britain: Department for Work and Pensions

Publisher: The Stationery Office

Published: 2013-04-23

Total Pages: 28

ISBN-13: 9780101860529

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In the response to the consultation document Meeting future workplace pension challenges: improving transfers and dealing with small pension pots, the government confirmed it's intention to bring forward primary legislation to create a system where, broadly speaking, people's pension savings move with them when they move jobs. As people build up larger pots they will have better visibility of their pensions savings, helping them plan for retirement. The government has worked with the pensions community to develop detailed proposals for how this automatic transfer system should work. These proposals are set out in this paper and, where possible, specific detail given about the features of the new system, for example which people and schemes would be within scope and pot size limits. This paper also sets out how the delivery model might work, and the government's intention to work closely with interested parties to design the best model. The government aims to provide for a system of automatic transfers in the forthcoming Pensions Bill, with the detail covered in secondary legislation, subject to formal consultation.

Government interventions to support retirement incomes
Government interventions to support retirement incomes

Author: Great Britain: National Audit Office

Publisher: Stationery Office

Published: 2013-07-12

Total Pages: 56

ISBN-13: 9780102983791

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Government measures to reduce the liability of the state for supporting people in their retirement are being managed separately, without adequate consideration of their combined impact on the overall objective of increasing retirement incomes. There is no overarching programme or single accountability for encouraging people to save for retirement. The Treasury leads on overall savings strategy, and DWP on workplace saving but, without a whole system view there is a risk that individual, but co-dependent interventions may not be effective in increasing saving for retirement. Spending on the state pension and pensioner benefits increased from 5.5 per cent of GDP in 1990 to 6.9 per cent in 2011-12, in part because of the growing pensioner population, but also because of increased spending per capita on pensioner benefits. The Government expects to reduce the potential long-term spending liability by increasing the future state pension age, introducing automatic enrolment into workplace pensions and changing the state pension. However the existing initiatives to manage this problem face challenges. Government does not have a formal published strategy to influence employers. The success of encouraging saving for retirement through automatic enrolment into a pension also depends on the responses of individuals, pension providers and employers - in particular on the proportion of employees who remain with the schemes. The value of the UK state pension, as a proportion of pre-retirement earnings, has historically been low compared to other developed countries, and projections for future spending on state pensions and pensioner benefits may prove too optimistic

Improving Governance and Best Practice in Workplace Pensions
Improving Governance and Best Practice in Workplace Pensions

Author: Great Britain: Parliament: House of Commons: Work and Pensions Committee

Publisher: The Stationery Office

Published: 2013-04-25

Total Pages: 64

ISBN-13: 9780215056979

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The introduction of auto-enrolment makes rigorous pension scheme governance essential. This Report calls on the Government to reassess the case for establishing one body with sole responsibility for regulating workplace pensions. There are concerns over current gaps in regulation and the potential for further gaps to arise as a result of now having three regulators, the Pensions Regulator; and the new Financial Conduct Authority and Prudential Regulation Authority, set up to replace the FSA. The Report argues that a single regulator is necessary to ensure that all members of workplace pension schemes are adequately and consistently protected. It also highlights that deferred-member charges and member-borne consultancy charges have the potential to cause serious consumer detriment. It recommends that both are banned by the Government, if significant progress is not made in the very near future by the industry towards ending them. There is particular concern about member-borne consultancy charges and those charges applied to deferred members - people who stop contributing to their pension scheme. The trend towards lower pension scheme charges is welcome. However, a good average is not sufficient and there is potential for consumer detriment in schemes that persist in retaining high charges. The Government should also regularly review its policy on capping charges for auto-enrolment schemes. Consumers are also continuing to lose out when they buy annuities because pension providers are not doing enough to ensure people are aware that they can shop around for the best annuity rate rather than being obliged to buy an annuity from their pension provider.