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UK eyes “automatic enrolling” for work schemes

UK – The government may be considering “automatic enrolling” of workers into occupational schemes, according to pensions minister Alan Johnson.

“I want companies either to offer decent information or get more people in their pension schemes,” Johnson wrote in a newspaper article. “For example, through automatically enrolling people into a pension unless they choose to opt out.”

He pointed out that more than four million workers “miss out on the pension contributions their employer makes”.

He said: “Pensions are too complex, not enough employers provide them and people have lost confidence in saving. The next stage of pension reform needs to address these problems.”

The comments come on the eve of the widely anticipated interim report of the Pension Commission, headed by Merrill Lynch vice chairman Adair Turner, a former head of employers’ group the Confederation of British Industry.

Johnson said the Commission’s report “may deliver tough messages for the government, employers and others and will no doubt present some stark choices for the future”.

He added: “With something this important it's vital that we respond carefully, avoid knee-jerk reactions and start a national debate about future pensions' policy.”

The CBI said today that employer pension contributions have doubled to 37 billion pounds (53.6 billion euros) a year since 1997 – and that it is hitting company profits, damaging investment and jobs.

"My biggest hope for the Turner report is that it will serve as a wake up call that clearly illustrates the extent of the problem the country faces,” said CBI head Digby Jones. “It is time to pull heads out of the sand and start talking about credible solutions, rather than only beating up on employers.”

He said companies have been “miscast as the villains of the pensions piece”. The CBI is opposed to pension compulsion – which it says could cost business up to 22 billion pounds a year.

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