The DWP confirmed last week that the European Commission has allowed auto-enrollment into these schemes from 2012, in line with reforms set out in the Pensions Bill, but not before.
But Tisa says the Government should define GPPs in a way consistent with the agreement achieved with the European Commission by making a small amendment in the current Pensions Bill. This would allow employers operating workplace pension schemes to choose auto-enrollment, leaving staff free to opt out if they choose.
Tisa says the extra four years of saving would increase the employee’s pension pot by as much as 25 per cent.
Director general Tony Vine-Lott says: “Nearly five million people are not taking advantage of working for a company that offers a workplace pension. This move could play a pivotal role in getting more people benefiting from saving now, rather than having to wait until 2012.”
Director of Portfolio & Retirement Planning Malcolm Small says: “The Government’s success with the European Commission means that there is now no good reason to delay the benefits of auto enrolment, one of their key pension reforms, until 2012.”