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ABI plea for Govt to rethink pension reporting rules

The ABI has slammed the Government over what it sees as inconsistencies

in reporting requirements for employer payments to personal pensions.

The Department of Social Security wants life offices to whistleblow on

employers which fail to pay employee contributions already deducted from

salaries.

But providers claim that such a move would be imp- ossible to monitor as

there is no current requirement for employees to make consist- ent

contributions to their pension funds.

The ABI says its members are particularly concerned about how they would

cope with monitoring these contributions as, under stakeholder rules, life

offices must acc- ept ad hoc payments for as little as 20.

It means that, before a provider could report fail- ure to pay a premium,

it would need to determine whether the employee was committed to paying

regular premiums or just one-off ad hoc payments.

The ABI is calling on the DSS for a clear distinction to be made between

regular and variable premiums, claiming that, without this distinction,

most providers would have to carry out a costly manual process to meet

reporting requirements.

An ABI spokesman says: “This would be prohibitively expensive in the

low-cost environment the Government is seeking to promote for stakeholder

pensions. Also, the requirement to have a record in advance of payments

showing the due date would impinge on the flexibility of pre- mium

payments.”

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