UK minister rebuffs calls for delay to DC charge cap, Budget proposals
The UK pensions minister has forcefully rejected calls from lobby groups and opposition MPs to consider delaying a raft of changes to defined contribution (DC) schemes, expected in 2015.
Speaking at the industry conference, Pensions and Benefits UK, Steve Webb, a Liberal Democrat minister, said he would not consider further delays to implementing a charge cap.
The minister originally launched a consultation in the Autumn of 2013 on capping charges in auto-enrolment default investment funds, expected to be implemented by April 2014.
However, after concerns were raised by the insurance lobby, a large provider of default auto-enrolment solutions, the government conceded a delay to April 2015.
The government followed this with a raft of changes to at-retirement options for DC savers, and pensions lobby groups called for further postponement having raised issue with the amount of legislative changes in 2015.
In response, Webb said he saw no reason to allow for further delays in ensuring savers being auto-enrolled received value for money.
“People are saying we should slow down and April 2015 is too soon to give people value for money in pensions,” he said.
“What my answer is: over my dead body.
“Whenever we get pressed to do something about things, and then do it, people say we have rushed it. We have waited quite long enough. Auto-enrolment will have been running for almost three years by the time the charge cap comes in.
“April 2015 is a firm deadline, it is not moving.”
The statement comes after Dame Anne Begg, a Labour MP who chairs the committee charged with scrutinising government pensions policy, said it had tried to rush in reforms announced in the Budget.
She said the reforms, which see the removal of requirements of DC savers to annutised, and the right to access free face-to-face guidance on retirement options, would be a challenge, and ‘tight”.
However, Webb shot down suggestions these reforms could also be delayed to ease the pressure on the pensions industry.
“Absolutely not,” he said.
“Every year, people tell me why this year is the wrong time. Virtue is always best deferred, I gather, but we have to get on with it.”