View more on these topics

Providers hit back over Steve Webb’s master trust warning

webb.jpg

The Government will have to introduce new legislation if it wants to prevent employers setting up trust-based schemes to take advantage of refund rules, says Standard Life.

At a Headlinemoney event in London this week, pensions minister Steve Webb warned of the “regulatory arbitrage” created by employers launching trust-based schemes due to the ability to get refunds if employees leave within two years.

Webb said he was worried about the effect this would have on individuals who frequently move jobs. The Department for Work and Pensions will shortly be issuing a call for evidence to examine ways of addressing the issue.

Webb said: “We want to send out a very clear message that says we do not want people to end up with no pension because they get these refunds.”

Trust-based schemes allow employers and employees to get contribution refunds if the employee leaves within two years.

Providers including Legal & General, Xafinity and Standard Life, have recently launched or revamped master trusts in anticipation of the Government’s auto-enrolment reforms.

Standard Life head of pensions policy John Lawson says: “It is up to Steve Webb to legislate against it. That would kill the market off. I do not think wise words and guidance are enough because the market will do what the market does unless you stop it.”

Legal & General launched the WorkSave pension trust in November last year. An L&G spokesman says: “We launched the trust in response to employee demand. If the Government is going to change legislation, we would need to look carefully at why that was being done.”

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. Governments in this country increasingly seem to think that they can govern by ministerial announcement. The sooner these Ministers get slapped back into place the better. Citizens organise their affairs by the rule of law. If Mr. Webb wants to change the law, he has to go through due process.

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