16 November 2007 – The Pensions Regulator given key reform role
The Pensions Regulator will monitor a new system of pension saving from 2012, Minister for Pensions Reform Mike O’Brien announced today.
People earning more than £5,000 a year will be automatically enrolled into a qualifying work-based pension scheme or personal accounts, subject to Parliamentary approval of reforms to be published in the forthcoming Pensions Bill.
As the regulator for all work-based pension schemes, the Pensions Regulator will monitor personal accounts as a whole, as well as ensuring employers meet their obligation to automatically enrol staff into a good workplace pension scheme.
Mike O’Brien said:
“I believe the Pensions Regulator is well-placed to perform this important new role. It currently does an excellent job protecting pension scheme members while also demonstrating sensitivity towards the needs of businesses.
“I am confident the Pensions Regulator can continue to perform this excellent service and handle the new personal accounts scheme with no detrimental effect to its existing role.
“Working with the Pensions Regulator we will put in place a simple, proportionate compliance regime which ensures employers meet their obligations without imposing any unnecessary burdens.”
The Pensions Regulator will use a proportionate approach, focused on enabling employers to meet the requirements of the proposed legislation – which include the employer automatically enrolling staff into a qualifying scheme, and providing a minimum 3 per cent employer contribution.
The Pensions Regulator chairman David Norgrove said:
“We welcome the confidence in us shown by choosing us to undertake this task, which will be central to the success of personal accounts.”
While the Pensions Regulator will be responsible for ensuring employer compliance with the new requirements, HM Revenue and Customs will have an important role in providing them with the information needed to identify employers, forming the basis for employer registration to be undertaken by the Pensions Regulator.
Notes to Editors
- The Pensions Regulator was established in the Pensions Act 2004. Its duties
are:
- to protect the benefits of members of work-based pension schemes;
- to promote good administration of work-based pension schemes;
- to reduce the risk of situations arising that may lead to claims for compensation from the Pension Protection Fund.
- Personal Accounts are part of the Government’s pension reform plans. The Pensions Act 2007 brought the first stage of these reforms into law, including establishing the Personal Accounts Delivery Authority to help set up and advise on the scheme.
- Under the proposed changes, employers will have to offer their own work-based scheme or enrol employees into personal accounts. Employees will contribute a minimum of 4 per cent of their earnings a year, matched by a minimum 3 per cent employer contribution and 1 per cent in the form of normal tax relief from the Government.
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