Personal Account Opt Out Proposals
Published / Last Updated on 15/02/2008
Personal account opt out proposals have been welcomed by Standard Life.Personal account opt out proposals to allow employers offering high quality pension schemes to temporarily opt out of auto-enrolling their new employees into the new style Personal Account pension.
The personal account is a new style compulsory pension scheme that will start in 2012 where both employers and employees will be forced to contribute payments.
Mike O’Brien, Minister of State for Pensions Reform has proposed that employers contributing 6 per cent or more to their pension schemes should not have to enrol staff into Personal Accounts on their first day of employment, the suggested maximum waiting period is currently 3 months.
Our view
This proposal to opt out of the personal account will allow employers offering good quality pension schemes to continue operating a waiting period within their pension scheme and will hopefully help limit the number of employers who make significant changes to their existing good quality schemes, either by closing them or reducing the contribution level.
For those who do not offer employees a pension scheme, compulsory payment into a personal account is tantamount to another tax. Employers need to plan now.
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Learn more about the personal account and related topics in the Pensions Adviser Channel
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