Pension providers and businesses have backed the Government’s decision to delay implementing an auto-enrolment charge cap, although Labour claims policymakers have “botched” the reform.
Earlier today pensions minister Steve Webb confirmed plans to cap charges for auto-enrolment default funds in April this year had been pushed back by at least 12 months to give business time to prepare for the change.
The Association of British Insurers, which previously warned the original timetable put the successful delivery of auto-enrolment at risk, has welcomed the decision.
ABI head of savings, retirement and social care Yvonne Braun says: “It is a sensible decision not to make changes now which would cause disruption at an operationally sensitive time with thousands of new employers setting up schemes and provider capacity already strained.”
Confederation of British Industry director of employment and skills Neil Carberry adds: “The Government has listened to business concerns about the impact of a charge cap announcement at short notice.
“What we now need is a system that ensures choice for companies trying to do the best for their staff.”
However, Labour shadow pensions minister Gregg McClymont claims policymakers are now in “headlong retreat” over the proposed charge cap.
He says: “Ed Miliband called for a cap on pension charges over a year and a half ago, and the Government subsequently promised a pension price cap. But it has botched the job.
“The minister’s “full frontal assault” on pension charges has turned into a headlong retreat.”
Wingate Benefit Solutions corporate adviser Richard Grover says: “This should have been sorted before auto-enrolment had started.
“In my view the Government should now wait until all schemes have staged in 2018 to minimise the disruption to employers who are implementing auto-enrolment.”