View more on these topics

‘Auto-enrolment to be bane of GPPs’

Group personal pensions will be swallowed up by personal accounts because they cannot meet the national pension savings scheme requirement for auto-enrolment, warns Scottish Life head of corporate business Mark Polson.

The Government has stressed the need to protect existing provision but Polson says one of the requirements to qualify for exemption – auto-enrolment – is impossible for GPPs to meet because of the 2004 European distance marketing directive.

This requires the signatory to be in the room when a contract is signed for it to be valid. The only exemption is when the customer has given prior written consent.

The DMD has proved to be a sticking point for auto-enrolment in GPPs but does not affect occupational schemes in the same way.

Polson says: “This will inevitably lead to levelling down. Employers will naturally do what is administratively less cumbersome and this is yet another hoop for them to jump through. It is time the Government thought about the practicalities of personal accounts.”

Scottish Widows head of pensions development Ian Naismith says: “This is one of the biggest obstacles to get around and one that the Government has to crack if it wants good GPPs to continue to run.

“The industry was geared to operate auto-enrolment in GPPs but the DMD scuppered this. I am confident this obstacle will be overcome.”

Recommended

Popularity of wrap rises among IFAs

Two-thirds of IFAs are very likely to recommend wraps in the future up from just over 50 per cent a year ago according to a survey by Watson Wyatt.The survey found that IFAs are most likely to consider recommending Skandia, Cofunds and Funds Network wrap platforms to customers.The most commonly cited reasons why advisers think […]

Barnes takes up CEO title at BestInvest

BestInvest has announced the appointment of a new CEO today with founder and controlling shareholder Nigel Spiers passing over his responsibilities to newly recruited Andrew Barnes.

IFAs alerted on protected rights cash

IFAs could be inadvertently misleading their clients by telling them they cannot hold protected rights in a Sipp, according to Merchant Investors head of compliance Tim Fox.It is not possible to hold protected rights in trust-based Sipps but clients can invest this money in insured Sipps.This was confirmed by the Department for Work and Pensions […]

UK: mid-year review and outlook

By Mark Martin, manager of the Neptune UK Mid Cap Fund, and Scott MacLennan, manager of the Neptune UK Opportunities Fund H1 2014• Equity markets continued to show strength: despite a strong rally in 2013 driven by a market-wide re-rating, equity markets continued to generate positive returns for investors. Economic activity continued to be stimulated […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment