Government to allow auto-enrolment into workplace pensions
Resource type: Legal update: archive
Published on 26-May-2008
England, Scotland, Wales
The government plans to amend the Pensions Bill 2007 to allow automatic enrolment into workplace personal pensions as part of the 2012 pensions reforms. The Bill already allows for auto-enrolment into occupational pension schemes (including personal accounts) but there were concerns that extending this to contract-based schemes would breach European consumer protection directives. Until now, the understanding has been that the directives prohibit contract-based schemes from automatically enrolling employees. Instead, these schemes have to operate an opt-in method (normally meaning that an employee has to sign an acceptance letter to join). The European Commission has now confirmed to the DWP that automatic enrolment into personal pensions that are provided by the employer (such as group personal pension plans, group SIPPs and group stakeholder schemes) will not offend the EU directives. This does not include personal pension arrangements that employees have obtained for themselves (even if their employer contributes to them).