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Pensions charge cap pushed back until April 2015

Pensions minister Steve Webb told Money Marketing “nothing changes” on AMDs this April.

Pensions minister Steve Webb has confirmed the automatic enrolment charge cap and ban on active member discounts will not be implemented until April 2015 at the earliest.

Speaking at the Confederation of British Industry pensions conference in London last week, Webb said the Government needs to “think carefully” about transition arrangements for pre-2015 schemes.

Speaking to Money Marketing after his speech, Webb also confirmed any ban on AMDs would also be delayed and that “nothing changes” this April.

He said: “There was a view in the consultation responses that changing the rules within 12 weeks of an employer’s staging date didn’t quite stack up. So the changes we make will apply to firms who stage from April 2015.”

In a written ministerial statement published last Thursday Webb said a charge cap “will not be introduced before April 2015”.

The statement said: “We remain strongly minded to cap pension scheme charges in the default funds used for auto-enrolment. However, we have consistently encouraged firms to start getting ready for auto-enrolment twelve months ahead of the time the new employer duties apply to them.

“Therefore, to give those employers at least twelve months notice of the rules that will apply to them; I can confirm that any cap on charges will not be introduced before April 2015.”

A Labour source says the wording of the statement is “tantamount to saying the reform is dead in this Parliament”.

It remains unclear at what level the Government plans to set the charge cap or whether transaction costs will be included. The Department of Work and Pensions has proposed three possible charge caps – 0.75 per cent, 1 per cent or a two-tier “comply or explain” model.


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