The multi-employer scheme for charities wants to confirm to its members whether they need to make provision for personal account arrangements, but has been left disappointed by new wording in the pensions bill.
The bill confirms that employers that already offer workplace pensions may seek exemption from offering personal accounts, but it warned of future regulations that will qualify which sort of schemes can claim exemption.
Further, it warns that if employees are obliged to pay contributions above a yet-to-be-specified amount then they will not be able to claim an exemption.
Exemptions will also not be available if annual management charges exceed an unconfirmed amount, while there is indistinct wording around the eligibility of average salary schemes.
Logan Anderson, head of customer relations for the Pensions Trust, is concerned the 7% member contribution rate for its member schemes might be deemed to high to qualify for exemption.
He also expressed unease over the fact that several career average revalued earnings (CARE) schemes run for clients will fall foul of rules on average salary schemes.
Anderson said: “If employers’ existing pension arrangements do not meet the exemption criteria then some form of action will be required. This could be levelling the existing schemes up or down, offering personal accounts alongside the existing arrangement, or replacing the existing arrangement with personal accounts.
“This will take time: employers and trustees will have to consider their approach to pension provision post-2012, formulate proposals, perhaps consult with the workforce on proposed changes, and implementation will follow.
“The pensions industry would dearly like to avoid the last-minute scramble that took place when the pensions aspects of age discrimination regulations were implemented at the end of 2006,” he concluded.
David Rowley
