Pensions fee cap delay: what it means
Delayed pension fees cap gives UK businesses time to auto enrol
Pensions Minister Steve Webb confirmed this week that Government action to reduce the cost of workplace pension schemes will not take effect until 2015; delaying the introduction of a cap on pension charges for “at least” a year, as reported by the BBC.
In December 2013 (before the consultation process had been completed) it was suggested that the Government cap on fees would be set at 0.75 per cent – attracting criticism from the industry who believed it to be too high.
With discussion and debate on the topic rife, even after the consultation period closed, the recent announcement to postpone the cap on fees, from April 2014 to some time in 2015, has been welcomed by business and the pension community alike.
“Pushing a cap through for this April would have been a mad rush and could well have derailed the auto enrolment programme,” said Laith Khalaf, a pensions expert at Hargreaves Lansdown in a recent Daily Telegraph article.
Aviva’s head of policy, John Lawson commented: “Employers are under pressure with the rollout of automatic enrolment – giving them some certainty that any charge caps will apply from 2015 gives them time to prepare. Waiting a year will give valuable breathing space to employers so they can get auto enrolment up and running, while ensuring scheme members can be confident they are getting a fair deal.”
As the discussion continues and the pension fee cap awaits an implementation date, it’s no wonder that the NEST (National Employment Savings Trust) reported that Nine in 10 firms will seek auto enrolment advice.