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Pension plans ‘more user-friendly’

Pension plans ‘more user-friendly’

The government has outlined proposals to make auto-enrolment “more user-friendly” for employers. The Department for Work and Pensions (DWP) opened a consultation on the proposals yesterday, based on feedback from employers and pension and payroll providers.

Last October staff at the UK’s largest firms began to be automatically enrolled in a workplace pension, designed to supplement the current state pension and to halt the sharp decline in workers’ financial planning for their retirement, which both they and their employers will pay in to.

Key recommendations include:

  • Streamlining the process for assessing eligibility for auto-enrolment by allowing firms to assess eligibility using information collected by payroll systems
  • Lifting the requirement for workers to be automatically enrolled if they have recently been put in their company pension scheme and have left it
  • Looking at whether the whole process could be made easier for some employers, whose approach already meets the aims of automatic enrolment or who offer a formal benefit scheme

Steve Webb, the Pensions Minister, said the plans will ensure that parts of the legislation work better and are more user-friendly. Auto-enrolment will be staggered over the next few years until 2018.

“Employers and our partners in the pensions and payroll industry have made a major contribution in delivering these landmark reforms. We want to build on this as medium-sized employers prepare to automatically enrol their staff into a workplace pension,” he said.

The smallest firms begin auto-enrolment for their staff in January 2015. The department will be seeking detailed responses on its plans and the consultation will run until May 7.

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