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ABI and actuaries split over advice in the workplace

The ABI and the Association of Consulting Actuaries have taken opposing positions on the Department for Work and Pensions&#39 Informed Choices proposals for workplace pension information.

The ABI welcomes the drive to improve the knowledge of the millions of people believed to be saving nothing or to little for their retirement.

But the ACA is concerned that the idea that employers which fail to contribute to stakeholder schemes should be required to pay for advice to staff on pensions will be too costly.

The ACA is also concerned that the proposals mark the first step down the road to compulsory stakeholder contributions by employers, which could lead to some companies reducing contributions to the minimum contribution.

The Confederation of British Industry welcomes the automatic opt-in proposal but says the move could be inappropriate where employees are on very low incomes or where staff turnover is very high.

ABI head of pensions and savings Joanne Segars says: “ABI research shows that nearly half of the population know little or nothing about pension issues, so this action on informed choice is good news. The Government should introduce bold proposals to incentivise employers to contribute to pension schemes and provide financial advice in the workplace.”

ACA chairman Gordon Pollock says: “The Government must be careful not to add additional burdens on schemes and employers. There are more requirements on employers floated in the proposals that will worry businesses, for example, ensuring all employees have access to decent information.”

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