The DWP last week confirmed that the European Commission had agreed to allow auto-enrolment into GPPs from 2012 in line with reforms set out in the Pensions Bill but has emphasised that this agreement only applies from the launch of personal accounts.
But Standard head of pensions policy John Lawson says allowing employers to adopt auto-enrolment before 2012 would protect schemes threatened by a new EU directive and boost employees’ pension pots.
The unfair commercial practices directive, introduced this week, could outlaw the seminar method of enrolling staff. Lawson says auto-enrolment on a voluntary basis would allow employers with good quality schemes to get round the new directive.
He also says it is in the DWP’s interest to get people saving earlier because a four-year delay could mean that a 30-year-old’s pension pot would be £68,000 worse off. He says: “Voluntary auto-enrolment before 2012 has got to be in the interest of the Government because the four years between now and 2012 will cause an enormous dent in savings.”
A DWP spokesman says: “The European Commission agreed it would be acceptable to auto-enrol employees into workplace personal pensions from 2012 under the reforms set out in the current Pension Bill.”