Guest comment: Simple auto-enrolment changes needed sooner

It was fascinating to hear the Pensions Minister, Guy Opperman, lay out his legislative priorities at the SPP’s conference session recently.

His focus areas are the Pensions Schemes Bill and ESG issues. Medium- and longer-term priorities are the dashboard, superfunds and removing the barriers to investing in illiquid assets.

The Pensions Minister was clear that what to be included in the Pensions Schemes Bill had not been an easy task, saying it was like ‘picking his favourite children’.

When asked about the recent consultation on DC consolidation, with some exceptions he was direct – ‘bigger is best’. And this applied to DB too.

All these are excellent actions but they unfortunately do not include those not in pension schemes. Nor do they address sufficiency of contributions.

Auto-enrolment is the answer and here the news was disappointing. We are unlikely to see implementation of the recommendations of the auto-enrolment review until the mid 2020s.

At the SPP we believe simple changes can be made sooner. For example, removing the age criteria and extending auto-enrolment to cover all employees.

On sufficiency, the pensions industry agrees an 8 per cent total contribution is too low. Now is not an easy time to be increasing employment costs but we need to start the debate soon if we are to achieve sufficiency of contributions by 2030.

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