The Department for Work and Pensions’ (DWP) review of automatic enrolment has called for feedback on the existing and future coverage of automatic enrolment, employee engagement, and contribution levels.
The 2017 review of automatic enrolment, which will be led by the DWP and an external advisory group, will seek to ensure that auto-enrolment continues to meet the needs of individual savers and that the technical operation of the policy is working as intended.
The government has released a set of initial questions relating to the review, which call for feedback across three core areas: coverage, engagement and contributions.
Employers, employee representatives, pension industry professionals, payroll staff, independent financial advisers, employee benefits consultants and the general public have until 22 March 2017 to respond.
The review will explore how to achieve a balance between enabling as many people as possible to save into a workplace pension, while also ensuring it makes economic sense for them to be included. Key questions in this area include whether the earnings trigger and age criteria bring the right individuals into auto-enrolment, whether there is a case for exempting any group of employers from auto-enrolment duties in light of the evolving labour market, and how to support self-employed individuals with retirement saving.
Questions around engagement will focus on how communications can be driven to increase effective engagement and personal ownership of pensions, so that employees can better understand and maximise their savings. The review asks for feedback about the most and least effective touch points for engagement to reinforce personal ownership of pensions, and about the challenges and barriers to sustained engagement for different cohorts and individuals, as well as how these can be overcome.
The review looks to explore further evidence around contribution levels and what these could look like after April 2019. Seeking to understand issues around contribution rates to inform longer-term policy thinking, the review calls for feedback on the key drivers, opportunities and barriers for individuals and employers in terms of behaviours around sustaining or increasing contribution levels. It also poses questions around the potential scope for a more flexible approach to contribution rates to reflect an individual’s life and employment journey, and for views on the most appropriate balance between employer and employee pension contributions.
In addition, the review will include an examination of the charge cap, inviting responses as to the advantages and disadvantages of lowering the level of the default fund charge cap.
The DWP has also announced the chairs and members of the external advisory group.
Ruston Smith, trustee director at the Peoples’ Pension, Jamie Jenkins, head of pensions strategy at Standard Life, and Chris Curry, director of the Pensions Policy Institute will chair the group. Each chair will lead on a different aspect of the review, with Smith focusing on strengthening engagement, Jenkins leading on coverage of auto-enrolment, and Curry leading on the evidence base for future contributions.
The other members of the advisory group are: Carl Emmerson, deputy director at the Institute of Fiscal Studies; Jane Vass, head of public policy at Age UK; Neil Carberry, director for people and skills at the Confederation of British Industry; Linda Ellett, partner, tax and pensions practice at KPMG; Nigel Stanley, chair, members' panel at Nest; Jocelyn Blackwell, trustee director at Now: Pensions; Judith Hogarth, pensions policy for the EEF.
Richard Harrington, minister for pensions, said: “Automatic enrolment has been a huge success but there is still significantly more work to do if we are to set the next generation on a path to a financially secure retirement. This is why I am delighted to announce this expert advisory group who will work closely with government to look at what we can do to build on our success.”
