TISA says the Government’s recent success in confirming that automatic enrolment into all forms of existing workplace pension is consistent with EU law means the way is now clear for it to legitimate the process forthwith rather than wait for the launch of Personal Accounts in 2012 to right now in 2008.
It says all the Government needs to do to make this possible is define workplace pensions in legislation in a way consistent with the agreement they have achieved with the European Commission. The body says this could be done through a small amendment to the Pensions Bill currently going through Parliament.
Employers operating workplace pension schemes could then choose to automatically enrol all of their employees or perhaps all new employees when they join, leaving these people free to opt out if they want.
TISA director-general, Tony Vine-Lott says: “Nearly 5 million people are not taking advantage of working for a company that offers a workplace pension. This move could play a pivotal role in getting more people benefiting from saving now, rather than having to wait until 2012. Starting to save four years early can make a big difference to employees who chose not to opt out – easily increasing the amount saved towards retirement by as much as 25 per cent, if not more.”
Malcolm Small, Director of Portfolio & Retirement Planning at TISA says: “The Government’s success with the European Commission means that there is now no good reason to delay the benefits of auto enrolment, one of their key pension reforms, until 2012.”