Under Government proposals, employers who run GPPs as good or better than personal accounts will be exempt from the scheme, with all staff auto-enrolled into the employer’s GPP.
Concern had been growing in the industry that EU law would prohibit the auto-enrolment into contract-based schemes such as GPPs.
It is understood the Department for Work and Pensions is yet to receive a formal written response from the EC but it has verbally agreed that auto-enrolment of employees into GPPs would be allowed as this is outside the scope of the Distance Marketing Directive.
The DWP is believed to want to amend the Pensions Bill before it reaches the House of Lords on April 22 to include legislation enabling auto-enrolment into GPPs.
A DWP spokesman says: “We are seeking confirmation from the EC that auto enrolment into personal pensions is compatible with European consumer protection legislation. We have not had official notification.”