UK - Standard life and the Investment Manager Association (IMA) have come out in support of the government white paper on personal accounts.
Sttandard Life said the white paper gave an exemption to employers who offer good occupational schemes and it believed this exemption should be extended to employers offering good contract-based schemes.
It also believed automatic enrolment must be made to work for all existing schemes, including contract-based schemes and suggested schemes operating this practice could be monitored to ensure take up rates are in line with the take up rates within personal accounts.
Standard Life also said the automatic provision of life insurance cover through personal accounts is a feature worth considering in more detail.
The IMA claimed that if the personal accounts system was to fulfil its potential to boost UK savings, its design needed to combine maximum simplicity for employers and employees, with a robust governance structure. It said the proposals in the White Paper were a “significant step in this direction”.
Both Standard Life and the IMA believe that the contribution cap should be £3,000 rather than £5,000 in order to limit the impact on existing schemes. £3,000 allows everyone in the target group to at least double their contributions to personal accounts.
Standard Life Assurance marketing technical manager Andrew Tully said: "It is essential that the government designs personal accounts to complement current provision, not to replace or compete with it. Personal accounts should become an addition to the pensions landscape specifically targeted at those who aren’t saving, and those who don’t have access to good workplace pension schemes."
IMA chief executive Richard Saunders added: “Personal accounts have the potential to give a real boost to the savings culture in the UK. The White Paper proposals are a good start, and the vision of a high quality savings vehicle, independent of government and focussed on its target market, can benefit savers and the wider savings industry alike. There is still work to do to keep that focus on the target market and to get the interactions with means testing right, and we look forward to working with the government to deliver those results.”
The top stories this week were the High Court's decision to block the £12bn annuity transfer from Prudential to Rothesay Life, and a separate court ruling that 'raises the bar' for pension rectification exercises.
Guaranteed minimum pension (GMP) equalisation has soared to the top of pension schemes' to-do lists, with 58% stating it is a priority project, research from Equiniti has revealed.
Professional Pensions is holding its defined contribution (DC) conference on 4 September.