View more on these topics

‘Govt underestimating cost of enforcing NPSS’

Axa says the fact that the Government needs 16 enforcement teams to police the minimum wage shows it is underestimating the cost of monitoring the national pension savings scheme.

Head of pensions and savings policy Steve Folkard says he was alerted to the extent of the resources used to ensure that firms pay the minimum wage by a recent announcement from the Revenue. He says the Government may have to devote similar resources to ensure the NPSS is effectively policed, as many employers that abuse the scheme are likely to be those also flouting the minimum wage rules.

Earlier this year, Axa raised concerns that employers, particularly smaller firms under cost pressure, may attempt to avoid offering pensions to staff and discourage employees from auto-enrolling in the scheme.

The Government’s revelation in February that only one employer out of 70,000 which have broken the rules on stakeholder pensions has been prosecuted has further raised concerns over how the NPSS can be monitored effectively.

Folkard says: “I think the fact that the Revenue has 16 enforcement teams working to enforce the national minimum wage nationwide shows that policing will be a costly challenge for the NPSS.”

Winterthur Life pensions strategy manager Mike Morrison says: “The Government will never be able to police the stuff that goes on behind the scenes at firms. Prevention is better than cure and the Government should be looking at what incentives it can provide to encourage people to stay in the scheme.”

But Folkard says: “The fact that so many teams are in place to enforce the minimum wage would suggest that prevention is not as easy as it sounds.”

Recommended

1

Claim-chaser rapped over misleading ad

The Advertising Standards Authority has upheld a complaint against a claim management company for giving misleading information about the success rate of CMCs compared with individual complainants.The complaint was brought by the FSA against CPH Financial Advisory Services, an IFA firm that also acts as a CMC, in connection with an advert from September 2005.The […]

Crisis, what commission

He says industry analyst Ned Cazalet, in his report Polly Put The Kettle On, have sparked a debate about the amounts that product providers are paying out to IFAs in up-front commission that is only serving to distract from the issues that life offices ought to be focusing on.

Sandler firm Kyte fined 250k by FSA

A company chaired by stakeholder reformer Ron Sandler has been hit with a 250,000 fine by the FSA. The regulator found that between 2001 and 2003, derivatives broker Kyte Group breached FSA rules by failing to properly reconcile client money balances and segregate the correct amount of money on behalf of its clients. It also […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com