UK - B&CE Benefit Schemes is piloting automatic enrolment under a project with the department of work and pensions.
The project, which is aimed at solving low take-up of stakeholder pensions, will automatically place construction workers into the B&CE industrywide scheme for construction workers and deduct contributions from their salary unless they choose to opt out.
The scheme, which has 320,000 members, already has a concession from the government to simplify the application process which exempts members from signing a declaration accepting employer contributions.
B&CE Benefit Schemes dep-uty chief executive John Jory (pictured) – speaking at the launch of B&CE’s Pension Perceptions in Britain Today report – said: “We are trying to remove unnecessary barriers to low earners to save for retirement.”
The report contains an analysis by former Downing Street adviser Ros Altmann who backs B&CE’s auto-enrolment idea.
She said: “Taking out a stakeholder pension will entail receiving perhaps 20 pages of key features, six pages of a data protection notice, money-laundering questionnaire and acceptance forms.
“It is easier for people to take out a £20,000 loan, which they may not be able to repay, than to put £20 per month into a stakeholder pension.”
She said that changing this application procedure was a matter of urgency as low stakeholder pension take-up was leading to providers pulling out of the small to medium-sized employer market.
Another reason for low take-up among SMEs is their fear of falling foul of financial advice regulations which means that many merely announce pensions with just a notice on a noticeboard or a few leaflets handed out on request.
Altmann concluded: “The current regulatory restrictions are inhibiting take-up of pensions. The government should consider allowing employers to promote their pension schemes to workers.”
This week's edition of Professional Pensions is out now.
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