UK roundup: NAPF, Pension Quality Mark, DWP, CBI, Xafinity
UK - The Secretary of State for Work and Pensions Iain Duncan Smith yesterday said that auto-enrolment heralded a "tipping point" for pensions.
Speaking at the first anniversary of the launch of the Pension Quality Mark (PQM), Duncan Smith said the private pension industry must seize the opportunity and build on its foundation.
"Auto-enrolment is not an invitation, and I repeat not an invitation, for the industry to start levelling-down. It must provide the stepping stone for increased quality provision."
He added that without the cooperation of the private sector, the reforms would not be successful.
Duncan Smith urged that the pension debate should shift away from the simplistic view of defined benefit as "good" and defined contribution as "bad", instead saying the discussion should be about the importance of "generally saving for retirement".
"It's an issue we really haven't done enough about", he said, adding, "Private pension saving is vital, no less than vital, to the well-being of society and the economy in general and we need to get this message across early and keep on repeating it."
He continued: "I believe that auto-enrolment, therefore, heralds a tipping point for pension provision."
The minister went on to praise the National Association of Pension Fund's (NAPF) work with the Pension Quality Mark as important, saying it helped ensure that employers offering good quality schemes were recognised.
The NAPF's chief executive Joanne Segars added: "Our PQM initiative encourages us to believe that employers understand the key role they can play in helping workers save for their retirement, and it could help guard against levelling down."
Meanwhile, the Confederation of British Industry (CBI) welcomed the review into auto-enrolment, praisning the government for the introduction of a three-month waiting period before employees are entered into a scheme.
John Cridland, deputy director general of the organisation said the review resulted in a simpler system while following all of the suggestions first outlined by Lord Hutton.
He added that it was "right" for auto-enrolment to only start three months after an employee had started at a company.
"This will avoid people on short-term assignments, who want to maximise their income, being auto-enrolled. It will also avoid the cost to employers of auto-enrolling staff who want to opt-out," he said.
Consultancy Xafinity Paymaster added their support to the waiting period, saying the changes provided "a more sensible approach", while reducing the administrative burden for employers and avoiding the situation of arranging for refunds if an employee decided to opt out after being entered into the system.