Legal issues prevent early UK pensions auto-enrolment

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  • Legal issues prevent early UK pensions auto-enrolment

UK - The UK government has claimed auto-enrolment cannot be brought forward before 2012 as the obstacles related to legal and European issues are "insurmountable".

Speaking at a National Association of Pension Funds (NAPF) seminar entitled The 2012 pension reforms - In Depth, Angela Eagle, pensions minister (pictured), admitted the introduction of personal accounts and auto-enrolment in three years time is a "huge task" but one that is achievable.

She told attendees "if we can get the 2012 reforms in place and in good form" then around 95% of targeted savers would receive some benefit from saving, and argued the 5% affected by the means-testing issue is a minority and should not be "used as a wedge to destroy the reforms".

However, when asked by Rachel Vahey, head of pensions development at Aegon UK, if the government would consider bringing forward auto-enrolment on a voluntary basis - to allow the industry to "test it ahead of 2012" and avoid any operational problems - Eagle admitted it would not be possible.

She said "there are some practical legal and EU issues about implementing auto-enrolment early which are pretty insurmountable as we've had a look," and added the government did not want to be "embroiling ourselves in legal and state aid issues".

Although Eagle reassured attendees that while the government cannot bring auto-enrolment forward, she said she was "anxious, nevertheless, to look at how we can practically assist you [the pension industry] with this implementation".

She continued: "Within the certain constraints we've got, operational issues are very, very high on my list and I am questioning PADA about it. But we also need the industry's operational expertise as we need to get into the very nitty gritty practicalities about the operation."

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email


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