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Blunkett puts pension plans on auto pilot

Work and Pensions Secretary David Blunkett says automatic enrolment will form part of the Government’s plans for future pension provision.

In a speech to the Fabian Society, Blunkett dismissed press speculation that the European distance marketing directive will affect the implementation of the policy which has received support from all three political parties as well as Pension Commission chairman Adair Turner. Blunkett said the DWP would be issuing guidelines on how to use opt-out techniques for workplace pension schemes.

He was speaking at the launch of a pamphlet entitled, The Politics of Pension Reform, written by Labour MP John Denham and Fabian Society research director Richard Brooks with contributions from Scottish Widows, the CBI, TUC, PPI and NAPF.

He also said the DWP is to publish a new report focusing on women’s pensions before the Turner report’s recommendations, building on work by a range of organisations and looking at the complexities involved in future policy.

Blunkett was careful not to rule out any policy but warned of the “enormous superficial attractions” masking the cost of a citizen’s pension and questioned whether such a policy would be fair or equitable.

He also reiterated Government concerns about the differences between people who start work at 16 or 18 and graduates who start working life much later but expect to retire at the same age.

Blunkett said: “The distance marketing directive does not interfere with auto enrolment and nor does consumer or privacy law. We decided to issue these guidelines following discussions with industry and employers who said they were unsure if they could use opt-out in workplace personal pension schemes under the law as it stands.”

Hargreaves Lansdown head of pensions research Tom McPhail says: “The fact that Blunkett is publishing his report on pension reform in advance of the Turner commission report suggests he is looking to marginalise Turner’s conclusions and move the debate to his own agenda. The commitment to auto-enrolment looks like another small step down the road to compulsory employer contributions.

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