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."
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