Auto-Enrolment - what the Government want to do next
The Government has convinced itself that it has a success story on its hands with auto-enrolment. The emphasis is now on capitalising on what has been acheived so far and minimising the risks going forward.
I have been lucky enough to meet with the Pension Minister and with key civil servants both in the DWP and its Pensions Regulator.
The principal concerns within Government are over operational issues and the risk of a provider failure.
The risk of operational failure is being addressed by the DWP through its "Workie" awareness campaign and through a reallocation of resource within the Pensions Regulator towards Charles Counsell's auto-enrolment division. Though the DWP has cut tPR's budget, the AE division is seeing an increase in its operational budget
The risk of a Pension Provider failing are also being addressed. The Queen's Speech included an announcement of a Pension Bill to be enacted in April 2017 which will address the precarious status of many master trusts currently being used for auto-enrolment. The DWP have been quick to consult on how master trusts can be better regulated; the steps being considered are;-
1. A more rigorous fit and proper person test for sponsors and trustees of master trusts
2. A capital adequacy test for master trusts - with remedial powers for those who fail it
3. A possible insurance scheme that might enable under capitalised master trusts to pay a levy (as occupational schemes do to the PPF)
4. Consideration to making trustees personally liable for any losses experienced by members from a failure.
Engaging the public
Ros Altmann, the Pensions Minister has also been speaking about her longer term plans for auto-enrolment. She has spoken about nudging contributions up from current planned levels though "auto-escalation" and of improving the engagement of members with their pensin pots.
Her plans for improving engagement focus on the delivery of a pensions dashboard, allowing members to see both their workplace and their state pension through a digital portal and financial education, which she sees being delivered in the workplace (though detail on this is very sketchy).
So the Government appears to be developing plans for the future and not resting on its laurels. The more cynical readers may suspect that it won't be quite as easy as the Government think, and I'd agree.
However, there is no shortage of confidence in Whitehall and Brighton, that auto-enrolment v2.0 will be as successful as auto-enrolment v1.0. We will see.
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I'm best known for helping small employers and business advisors with their problems with pensions. These are typically over choosing the right pension for auto-enrolment though through my work with First Actuarial, I get involved with big occupational schemes too.
I'm on this site as I see accountants as the missing...