Auto-enrolment should be the ‘centre-piece’ in the pensions reform in 2012, not the introduction of the new personal accounts scheme, according to Tim Jones, chief executive of the Personal Accounts Delivery Authority.

Speaking at Punter Southall's London Pensions Conference on 25 September 2008, he called for greater emphasis on the changing culture rather than the product itself.

Jones said: “We are aiming for workplace saving to become the ‘norm’ and we will be ready for the onset of employer duties in 2012.”

He told the conference that personal accounts are a component of a workplace reform package centred on automatic enrolment to complement existing provisions, adding "It is in no way designed to compete with the current market.”

When the reforms come into effect in 2012, employees must be auto-enrolled into either personal accounts or an employer’s qualifying plan.†

For existing defined contribution (DC) schemes to qualify as exempt, certain criteria must be met, including contributions being at least as high as they would be under personal accounts.
Jones said the introduction of personal accounts will force employers to start considering these issues in order to avoid sudden large increases in pensions costs.

He explained that there is a case ‘for all employers to use personal accounts’, no matter what size. For example, larger companies may use a ‘layering approach’ to the scheme when it’s not applicable to all staff.

A low-cost approach to rolling out personal accounts was described, with much of the core processes involved being performed online.†

Jones said personal accounts would be ‘a self-service e-business enterprise’, arguing that the use of technology would minimise errors and re-work, as well as reducing admin for employers.