Pensions charge cap to be delayed until April 2015
The introduction of a cap on pension charges will be delayed by a year in an attempt to make the transition to auto enrolment smoother for businesses, the government has announced.
The Department for Work and Pensions (DWP) has been discussing implementing a charge cap on pensions for some time now, with the initial plan being to bring these caps in from April 2014.
Last year the DWP launched a consultation which looked at different options for capping charges on auto enrolment pensions. These caps would cover all relevant charges including contribution and administration fees. The caps mentioned included a 0.75%, 1% and a two tier “comply or explain” cap. The comply or explain cap would give employers access to a 1% charge cap but would have to justify to The Pensions Regulator why they were charging 1%.
Speaking at the Confederation of British Industry pensions conference, Steve Webb said the government needed to “think carefully” about transition arrangements for pre-2015 schemes. He went on to say that rushing any changes would make things more difficult for businesses needing to stage over the next 12 months.
“Our priority should not be sorting out value for money for those who have already staged to the detriment of those yet to stage.”
The government has not yet confirmed what the changes will be in 2015 but they will focus on charges, scheme quality, governance and transparency.
Have you started preparing for auto enrolment yet? Industry experts recommend starting at least 18 months prior to your staging date. IRIS offers a range of auto enrolment training seminars, running across the country to help you prepare.
Call the team to book your place today and make sure you’re ready!
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