I thought that my first job today would be to deliver some headline messages regarding employee benefits, and pensions in particular, from yesterday’s budget.
Yet before I could even get to that, a completely different news item caught my attention, which is frankly relevant to more employer’s than some of the budget items.
The article that caught my eye was this one:
https://www.wsandb.co.uk/wsb/news/2229642/tpr-outlaws-autoenrolment-into-small-dc-and-legacy-schemes
Whilst this is no surprise as such, it does show quite clearly that employer’s seeking to comply with the new Auto-Enrolment (AE) legislation may not be able to use some existing schemes for this process. In particular, I would highlight the following quote:
O’Higgins added: “We also don’t want to see auto-enrolment into… schemes that require a higher level of financial literacy such as self-invested personal pensions [SIPP] or small self-administered schemes [SSAS].”
Many employers will offer a SSAS or full blown SIPP to senior employees, so this is certainly worthy of note, although I doubt many would really be using this option for AE if I’m honest.
And by the way, the reference in the following paragraph to ‘dodgy’ pension schemes could be misconstrued as referring to SIPP’s and SSAS’s. It does not, The Minister was referring more to old legacy schemes, with very high levels of charges or poor default investment choices. Just thought it worth clarifying that one!
If in doubt on this point, I do strongly suggest you check with your Jelf Consultant on this point, as this may impact on your Auto-Enrolment planning and timetable.
Best regards
Steve
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