The National Association of Pension Funds (NAPF) today (Weds) applauded the Government’s decision to press ahead with auto-enrolment into workplace pensions and the creation of ‘NEST’ from 2012.
Joanne Segars, NAPF Chief Executive, said:
“The Government has listened to most of the NAPF’s recommendations by adopting a common-sense approach that will widen pension provision, whilst still keeping existing good schemes open.
“It is a relief that all employers will be brought into the 2012 programme, and that smaller outfits will not be exempt. The whole point of this reform is that pensions reach all workers, including those in small firms.
“Giving a three month waiting period before an employee is auto-enrolled will help ensure that managing auto-enrolment is straightforward for employers. Staff who are keen to save can join the pension on day one, and don’t have to wait three months.
“We are pleased the Government ignored calls to significantly raise the earnings bar at which auto-enrolment is triggered. This would have put pensions beyond the reach of the very workers we need to reach. Raising the auto-enrolment trigger to £7,500 pa, with contributions payable from around £5,000 will help ensure that it pays to save, and that pounds not pence are paid into a saver’s pension.
“The greater flexibility on certification and the earnings band on which contributions must be paid echoes the NAPF’s calls for a common-sense approach. This will aid existing, good quality pension schemes to auto-enrol, and will help avert levelling-down.
“These reforms have been a very long time coming. We must move ahead at full speed to implement them to tackle the UK’s growing retirement savings crisis. A large swathe of employees currently has no access to a workplace pension, and that must be changed.”
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