Pensions reform will mean many things to many people. For the Government, the key to winning the hearts and minds of employers will be to make it as easy as possible for them to engage with the new personal accounts scheme.
But instead of concentrating on this laudable aim, the Government seems determined to see errant employers everywhere it looks. It thinks employers will try to cut costs by setting up GPPs. The legislation is currently written so an employer wanting to provide an exempt defined contribution scheme has to pay at least the same level of contributions into it as it would do into personal accounts. These ‘qualifying earnings’ have to be 8% of a band of full earnings (above £5035pa), including bonus, commission and overtime. The problem with this measure is the majority of defined contributio...
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